- Tooling (moulds, dies, jigs, etc.) used in manufacturing often stays in the supplier’s country, creating complex VAT issues for cross-border businesses.
- The general VAT rule is that VAT applies where the tool is supplied, regardless of where the finished goods are exported.
- Some countries (Bulgaria, Sweden, Switzerland, Liechtenstein) have historically treated tooling as part of the finished goods, allowing zero-rating or exemption when goods are exported.
- Bosnia and Herzegovina will introduce zero-rating for tooling from August 2025.
- Recent legal changes, especially in the EU, are altering these special rules, so businesses must monitor developments to manage VAT costs and reclaim opportunities.
Source: vatit.com
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