EC Sales VAT

crispy
crispy Trusted RegularSouthamptonRegistered Posts: 456
Hello,

I wonder if anyone could help with a qeury regarding the VAT position of UK Sales to another EC member state based country.

I understand that if you have the EC customers VAT Number and display this on the Invoice you can zero rate for VAT, and if the customer is not vat registered then you would have to charge UK VAT.

My question is if an EC customer is exempt from VAT in their country (as opposed to just being not registered) would you still have to charge UK VAT ?

Many thanks for any replies, hope question makes sense :)




Comments

  • fournaanjez
    fournaanjez Registered Posts: 32
    My understanding is that they are an EC customer with no VAT number/is not registered for VAT, therefore you would have to charge them standard rated VAT.

    However, I am in no means a VAT specialist so could be completely wrong...
    crispy
  • crispy
    crispy Trusted Regular SouthamptonRegistered Posts: 456
    Many thanks for reply - this is my thinking too....

    Our marketing Director looked at me as if I was mad for suggesting that we may have to charge UK VAT for an EC Sale...
  • RyanMIP
    RyanMIP LincolnshireRegistered Posts: 50
    edited November 2018
    Goods or services?

    If services, what is the nature of the services?

    What do you mean by: "if an EC customer is exempt from VAT in their country"?

    Is the customer a 'relevant business person'?

    What does the customer do?

    Is the customer receiving the supply because of 'what they do' (above)?
  • crispy
    crispy Trusted Regular SouthamptonRegistered Posts: 456
    Hello,

    Thank you for reply:

    1. Goods
    2. Customer business is VAT exempt (located in Finland)
    3. Transaction is Business to Business


    .
  • RyanMIP
    RyanMIP LincolnshireRegistered Posts: 50
    I am still not clear what you mean by "Customer business is VAT exempt (located in Finland)" - that is not an expression which UK VAT law would recognise.

    Nevertheless, in answer to your original question " My question is if an EC customer is exempt from VAT in their country (as opposed to just being not registered) would you still have to charge UK VAT ?" - yes.

    The general rule is that, for goods leaving the UK, the place of supply is the UK. This means that UK VAT is chargeable.

    If the European customer is VAT registered in another EU member state and he gives the UK trader his VAT registration number, then the UK trader will zero rate the supply.

    If, however, the customer is not VAT registered in another EU member state, the UK trader will charge UK VAT at the rate that would be appropriate to the goods being sold.

    I assume when you say "customer business is VAT exempt" what you are trying to say is that the customer makes wholly exempt supplies and so is blocked from registration in their home country. That being the case, UK VAT is chargeable at the prevailing UK rate.
    crispyMarieNoelle
  • crispy
    crispy Trusted Regular SouthamptonRegistered Posts: 456
    edited November 2018
    Perfect - Many thanks Ryan

    'I assume when you say "customer business is VAT exempt" what you are trying to say is that the customer makes wholly exempt supplies and so is blocked from registration in their home country. That being the case, UK VAT is chargeable at the prevailing UK rate. '

    Yes - this is what I meant
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