EU Intrastat Report Displays Shipping Cost, when it should only report movement of Goods within the European Union

Scenario:

·        Navigateto Transactions > Sales >Create Invoices to create an Invoice for an EU-based Customer

·        Chooseany Item

·        Ensurethat a Tax Code for European Sales is selected, e.g. EG-GB

·        Navigateto the Shipping tab

·        Choosea Shipping Method

·        Ensurethat the same Tax Code (EG-GB) is selected for this Shipping Cost

·        Savethe transaction

·        Navigateto Reports > VAT/GST > EUIntrastat > Report Style = Sale

·        Choosethe current Tax Period

·        Saveand Run the EU Intrastat Report

·        ActualResult:

·        TheShipping Cost is included in the Items total value

 

Findings:

·        Shipping represents the physical trade in goods within the EU Countries.

·        Itscost should also be declared in the IntrastatReport.

·        AnHMRC documentation supports this:

·        https://www.uktradeinfo.com/Intrastat/AboutIntrastat/GoodServices/Pages/GoodsServices.aspx

 

·        ForIntrastat purposes, when user talksabout trade with other countries of the European Union, user is only interestedin the physical movement of goods, not services.

 

·        Theonly exception to this is where the serviceis an integral part of the contract for the supply of such goods such as freight and insurancecharges which are included in with the price of the goods.

 

·        Goods are specific,tangible commodities, i.e. manufactured items such as fabrics and clothing,agricultural products, machinery, tools etc.

·        Aservice is something that isprovided by a third party, usually at a cost. This can take the form of:

·        Advertising

·        Businessmanagement and/or administration

·        Researchand design (such as for the development of computer hardware and software)

·        Provisionof training etc

·        Serviceshave no commodity code