Free zones

Group 22

GROUP 22—FREE ZONES

Item No

1

The supply by one free zone business (“A”) to another free zone business (“B”) of—

a

free zone procedure goods, if—

i

the supply of the goods would (apart from this provision) be taxable41 but not zero-rated, and

ii

A was authorised to make the supply;

b

a service wholly performed in the free zone on or in relation to free zone procedure goods by a person authorised to do so, if—

i

the supply of the service would (apart from this provision) be taxable but not zero-rated, and

ii

before a VAT invoice42 is issued in respect of the supply, B notifies A in writing that this provision applies to the supply.

NOTES

1

“Free zone business” means a person who is—

a

authorised to declare goods for a free zone procedure or to carry out a free zone activity, and

b

registered under this Act or exempted from registration under paragraph 13 of Schedule 1A to this Act43.

2

References to a person authorised to do a thing are references to a person authorised in accordance with the Special Procedures Regulations to do that thing.

3

“Special Procedures Regulations” means the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 201844.

4

“Free zone activity” and “free zone procedure” have the meanings given by the Special Procedures Regulations45.

5

Goods are “free zone procedure goods” if they—

a

are subject to a free zone procedure, or

b

comprise goods within paragraph (a) that have been combined with domestic goods by a person authorised to do so.

6

“Domestic goods” has the meaning given by section 33 of the Taxation (Cross-border Trade) Act 201846.

7

“Free zone” means an area in the United Kingdom designated as a special area for customs purposes under section 100A of the Management Act47.