Does the VAT treatment of exports differ based on the recipient’s VAT registration status?

Yes, the VAT treatment differs based on the recipient’s VAT registration status.

• If you export goods to a VAT-registered recipient, the export will be taxed at 0%.

• If you export goods to a non-registered recipient, and if the value of the goods supplied by you to the destination state is below the mandatory registration threshold in the destination state, then the supply will be taxed at 5%.

• If you export goods to a non-registered recipient, and if the value of the goods sent by you to the destination state exceeds the mandatory registration threshold in the destination state, then the supply will be treated as domestic supply. In this case, VAT will be applicable according to the VAT laws of the destination state and you will have to register for VAT in the destination state in this case.