VAT on EU acquisitions

amy256

Hi there,

Can someone please explain to me in which boxes VAT and net figures go for EU acquisitions?

I understand that I zero rate the VAT where the EU business is VAT registered. I understand that the VAT element of the EU acquisition will be declared in box 2 of the VAT return. However do I also have to account for it in box 4?

As for the net element of the acquisition, do I include this in my box 6 (total net sales) as well as box 8 or 9? I am getting confused.

Thanks in advance for any help

KoopaCooper

Hi Amy,

Yes, the VAT element of all EU acquisitions is included in both box 2 and box 4. This way, it's included on the form as its own amount (in box 2, added to output VAT) and then cancelled out again (by being included in box 4, input VAT), so overall it's zero-rated.

And yes, the net element of the acquisition is included in boxes 7 and 9.

Hope that helps you out. Good luck with your ITAX exam!

amy256

Many thanks

Im still not following... Getting the practice questions wrong where EU acquisitions are concerned.

I don't understand why it just states acquisitions on the VAT form and not dispatches too....is Box 2 sales TO the EU?

All the terminology is just really confusing me. Getting a headache!

KoopaCooper

No, box 2 really is for acquisitions FROM the EU.

EU acquisitions and dispatches are both zero-rated, but if you used dispatches in box 2 and included acquisitions in the box 4 figure, they wouldn't usually cancel each other out.

But because for some reason (I don't fully understand why either), HMRC want the acquisitions figure included on the form, they have to have it on both sides of the equation (ie. in boxes 2 and 4) to balance itself out.
Does that make sense?

Don't give up, you'll get there!

amy256

Thanks I passed my Indirect Tax exam yesterday!

bushra

Hi I booked my ITax exam next week and just wondered if anyone knew what the pass rate?