Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Overseas VAT - Again!

JamesBJamesB Feels At HomeRegistered Posts: 51
So sorry if this has done the rounds before!

1) UK Ltd co (vat reg) purchases goods from German Vat reg co.

Should German company exclude VAT as it is tax neutral zone and UK company put VAT in box 2 and 4 on VAT return at uk VAT rate?

If German co have included German VAT I assume Ltd co can request credit note for this amount?

2) Uk Ltd co (vat reg) purchases goods from Chinese company. Chinese company invoice them from China and do not include vat. Goods are dispatched from the UK though.

How does this work! are there any vat implications here?

I haven't been lazy, have looked on HMRC website but it is sooo user un-friendly and is certainly not clear as mud :-(

thanks guys,
J

Comments

  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    JamesB wrote: »
    So sorry if this has done the rounds before!

    1) UK Ltd co (vat reg) purchases goods from German Vat reg co.

    Should German company exclude VAT as it is tax neutral zone and UK company put VAT in box 2 and 4 on VAT return at uk VAT rate?

    If German co have included German VAT I assume Ltd co can request credit note for this amount?

    2) Uk Ltd co (vat reg) purchases goods from Chinese company. Chinese company invoice them from China and do not include vat. Goods are dispatched from the UK though.

    How does this work! are there any vat implications here?

    I haven't been lazy, have looked on HMRC website but it is sooo user un-friendly and is certainly not clear as mud :-(

    thanks guys,
    J

    Re Point 1: I would agree with everything you have said. In addition, I would also say that you should declare the purchase price of the German goods in boxes 7 and 9.

    Re Point 2: I'm assuming the goods were "made in China" (probably very cheaply because labour costs are lower there) and then imported into the UK and 'warehoused' until they are finally sold/dispatched. When goods are removed from the warehouse (after being imported from outside the EC) import VAT is due- so I'm assuming the UK Ltd co is paying the import VAT and getting a C79 (a certificate that proves the UK Ltd Co has paid import VAT and can claim this back in box 4 of the VAT return; see sections 1.5 and 2.3 of VAT notice 702).
Sign In or Register to comment.