- 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
Click on the logo to visit the website
Latest Posts in "Europe"
- E-invoicing in Europe: how to navigate compliance in 2026-2027?
- Spanish Art World Protests 21% Cultural VAT, Demands Reduction to Match European Standards
- India IRN vs Europe CTC: Key Differences in E-Invoicing Models, Clearance, and Reporting
- RTC Webinar: The SAF-T Landscape: Country-Specific Requirements & Best Practices in Europe (Feb 18)
- Key Features and Practical Details of European VAT Systems in 2026
