International Transport VAT Rules

International transport VAT starts with the service you invoice

The VAT treatment changes completely depending on whether the invoice covers goods transport, passenger transport, a standalone logistics service or transport charged as part of a sale of goods. A carrier invoicing an independent freight service does not apply the same analysis as a supplier recharging shipping costs with an intra-EU supply of goods. VAT rules in France overview applies as the starting point for French scenarios.

Goods transport and passenger transport do not follow the same logic

Goods transport is usually analysed through the VAT rules for services, with different rules for taxable and non-taxable customers. Passenger transport follows a distance-based rule: VAT is allocated according to the part of the journey performed in each country.

B2B goods transport: reverse charge is usually the starting point

For B2B intra-EU goods transport, the general B2B place-of-supply rule usually applies. The service is taxable where the business customer is established. A French provider therefore invoices without French VAT when the business customer is established in another EU Member State, and the customer accounts for VAT through the reverse charge.

French reporting for B2B intra-EU transport

A French supplier should report the transaction on the VAT return in France, line 05, and file a European services declaration, known in French as the DES. The invoice should clearly show that the service is subject to reverse charge by the customer.

Loading, unloading and handling can follow the transport service

Handling, loading and unloading services may follow the VAT treatment of the B2B transport service when they are ancillary to that transport. The key question is whether the ancillary service supports the main transport service or is sold as a separate, independent service.

Warehousing is a separate risk area

Standalone warehousing is normally linked to the location of immovable property. If the warehouse is in Belgium, Belgian VAT exposure may arise. Where storage is bundled with transport, logistics, maintenance or supervision, the whole arrangement may become a complex B2B service falling under the general B2B rule.

B2C goods transport depends on the route

For B2C intra-EU goods transport, VAT is due in the country where the transport begins. In the French source context, this rule is based on Article 259A of the French Tax Code. A private customer does not reverse charge VAT, so the supplier must check the departure country. VAT in France provides the applicable French VAT rates.

Ancillary B2C services are taxed where they are performed

For non-taxable customers, ancillary services such as loading, handling or unloading are generally taxable where they are physically carried out. This creates practical issues when a route includes services performed in several countries.

Third-country routes may require a distance split

For B2C goods transport involving a non-EU country, VAT may be due in each country according to the distance travelled there. However, an exemption can apply when the transport is directly linked to importation, exportation or transit. In the French source context, these exemptions are covered by Article 262 of the French Tax Code.

• Check whether the transport starts and ends inside the EU.
• Identify whether the customer is a taxable person or a private customer.
• Review whether the route is directly connected to import, export or transit formalities.

Passenger transport VAT is calculated by distance

International passenger transport applies the same core rule for B2B and B2C customers: VAT is calculated according to the distance travelled in each country. A bus journey from Paris to Barcelona, for example, is split between the French and Spanish parts of the route.

French distances can be exempt in specific cases

Certain French distances may be exempt, particularly for some air and sea passenger transport to or from abroad or French overseas departments, rail transit through France, and road transport of foreign groups of 10 or more people transiting through France.

For French reporting, keep the filing layer aligned with your invoice: French European services declaration (DES) and ESL and INTRASTAT in France are the two guides to check before closing the VAT file.