VAT on services to U.S. Clients
- Status
JamesFarrell
New Member
I have charged VAT to France and the UK and filed in in my VAT returns.
My accountant tells me that I shouldn't have done that as long as they are VAT registered on there side.
I'm not great at this stuff, so best to phone the Tax office, you can get good service on the phone for this kind of thing.
My accountant tells me that I shouldn't have done that as long as they are VAT registered on there side.
I'm not great at this stuff, so best to phone the Tax office, you can get good service on the phone for this kind of thing.
Defo ring the tax office, very helpful people.
Also they have some very good guides on line on VAT see http://www.revenue.ie/leaflets/vatguide_2008.pdf, think the table on page 43 applies to the supply of services and shows very quickly where the VAT lies.
As usual you are best to consult with a tax professional (either revenue or your accountant) to make sure.
Also they have some very good guides on line on VAT see http://www.revenue.ie/leaflets/vatguide_2008.pdf, think the table on page 43 applies to the supply of services and shows very quickly where the VAT lies.
As usual you are best to consult with a tax professional (either revenue or your accountant) to make sure.
The VAT rules have changed recently (2-3 years ago)
VAT used to be charge at point of sale now its charged at point of order.
For Example:
BEFORE
If you order from the UK then the VAT rate was 17.5% (uk vat rate)
NOW
If you order from the UK then the VAT rate is 21% (irish vat rate)
So if you get an order from France then you charge VAT at the French VAT rate.
If the client provides you with a valid VAT number then you don't charge VAT
You can check the VAT number here to see if its valid:
EUROPA site - Validation
When filling in your VAT returns you include the sale in the "sales to other EU countries" section.
You sure that's right for intra-EU transactions (aside from individual states that have tresholds above which you must reigster for a local VAT number)?
To the OP's question, assuming they are entirely U.S. based and the service/product is being consumed in the US, then "no"!
To the OP's question, assuming they are entirely U.S. based and the service/product is being consumed in the US, then "no"!
Yes it is. Its a bit more long winded then that as you can imagine but that's the main points so to speak.
With relation to individuals registering for VAT, that's not your concern. If they give you a VAT number and you check it on the link I provided and its not there then you charge them VAT. It's as simple as that.
Not disputing that!
I am disputing the rate at which you charge VAT. My understanding is that for intra-EU transactions, you charge VAT at your local rate, unless you trade over a threshold where the buyer's state require to register for VAT in their country. I can't see that applying to most on this forum. Whereas, you're suggesting that you charge VAT at the buyer's rate regardless of your trade amount with their state.
A number of years ago there was a (quite) uproar about changes to the VAT rules.
Before the changes if I ordered (say software) from the UK it would be
Price+17.5%
They changed a simple phrase like.
VAT will be charged at point of order.
This minor change means, now when I order from the UK the price is:
Price+21%
Every country in Europe has two VAT areas
Voluntary VAT registration
(You choose to register for VAT even though you are below the required income)
Compulsory VAT registration
(You must register for VAT as you are over the required income)
Each country requires you to register for VAT if you exceed X amount turnover each year.
What has the trade amount with the state got to do with anything.
If I take 5million a year from Germany or France why would the rate at which I charge my customers in them countries be any different.
Quite simply, not true! The only companies that I'm aware of in the UK to charge an Irish customer 21% VAT, are those larger companies that are required to register in Ireland (and thus charge Irish VAT rates). This doesn't apply to many, many companies in the UK (for example).
If I take 5million a year from Germany or France why would the rate at which I charge my customers in them countries be any different.
Because under the threshold that you and I have both mentioned, there is no requirement to charge VAT at the buyer's state's rate. That is my bone of contention.
So a UK company selling less than €37,000 of services to Ireland would charge an Irish business with a valid Irish VAT number 0 VAT. A UK company selling more than €37,000 (total sales, not per invoice) would charge the Irish company 21% VAT. The same applies for other EU countries.
What you've been implying in earlier posts that all intra-EU trade with the UK requires the UK seller to charge Irish VAT rates is, in my understanding, incorrect. That's my point (even if it has dragged on now!).
.cg
In an attempt to bring the topic back on-topic, and add value, let me directly answer...
For straight forward products & services transactions (to be consumed in the US by a US company), no.
By "working for" do you mean a buyer/seller relationship, or an employment relationship? If the former, 0 VAT applies (again, subject to them being a US co., consuming in the US ,etc)
Correct. For intra-EU trading where one's total income from a given EU state falls below that state's obligatory VAT registration, you charge 0 VAT to a party in that state, provided they produce a valid VAT number for that state. If you trade over the threshold you must register for VAT in that state, charge that state's rates, and declare/pay to that state. Your accountant (who should be trusted more than me!) is dead right.
OK
Go to: crucial.com/eu
Sellect a product then sellect Ireland and update your basket. The VAT rate will change from 17.5 to 21%
Pick any country you like at you will see the rate change for each one.
Crucial is not an Irish company. You are being charged 21% because your order is from Ireland.
This is not just on UK orders. I used them as an example, it could be any member state.
PS: no company is required to register in any other country....... anywhere. You only register if you plan on trading from that country
A UK company selling €40K services to a valid VAT registered (irish) company = no VAT
A UK company selling €40K services to a company (irish) not registered for VAT = VAT @ 21%
Its not rocket science!
Crucial (like Amazon, like Expansys, like Komplett, like many other big e-tailers) have registered (presumably becuase they're required, having gone over the individual state's thresholds for compulsory VAT registration) for local VAT, and charge accordingly.
However, that's not to suggest that the same holds true for other smaller companies in the UK, France or anywhere in the EU (just our examples are focussed on UK). To state that, or imply that is incorrect.
So if Irish Designer sells design servers to French Developer (and Irish deisnger doesn't trade more than is allowed by the French threshold, in to France), Irish Deisgner charges 0 VAT to French Developer if the latter produces a valid FR VAT number.
Most big e-tailers will have been required to reigster for VAT in the local states, so what you describe (and I've confirmed numerous times, now) holds true in that case, just not *ALL* cases as you've suggested.
If you don't believe me talk to your accountant, or the Revenue Commissioner, I'm done trying to clarify the point.
However, that's not to suggest that the same holds true for other smaller companies in the UK, France or anywhere in the EU (just our examples are focussed on UK). To state that, or imply that is incorrect.
So if Irish Designer sells design servers to French Developer (and Irish deisnger doesn't trade more than is allowed by the French threshold, in to France), Irish Deisgner charges 0 VAT to French Developer if the latter produces a valid FR VAT number.
Most big e-tailers will have been required to reigster for VAT in the local states, so what you describe (and I've confirmed numerous times, now) holds true in that case, just not *ALL* cases as you've suggested.
If you don't believe me talk to your accountant, or the Revenue Commissioner, I'm done trying to clarify the point.
Cgarvey is 100% correct
Big online shops like Amazon UK are VAT registered in Ireland and other EU states, so they charge their Irish clients Irish VAT.
A French online shop, for example, that doesn't sell that much into Ireland wouldn't have to be VAT registered here and would either charge 0 rate to business customers in Ireland or the normal French rate (leaving the Irish business to recoup it)
Big online shops like Amazon UK are VAT registered in Ireland and other EU states, so they charge their Irish clients Irish VAT.
A French online shop, for example, that doesn't sell that much into Ireland wouldn't have to be VAT registered here and would either charge 0 rate to business customers in Ireland or the normal French rate (leaving the Irish business to recoup it)
OK, cgarvey
Your correct. My understanding of the situation was wrong.
I have gone over and over the revenue doc's on this from my point of view and from yours.
And more points match what you are saying then what I am saying.
In saying that, I have never come across such a F****d up document. Its pretty obvious this document relates to EU law.
How do they expect anyone to get there head around this document!
PS just when you think you have them licked they get you again
Your correct. My understanding of the situation was wrong.
I have gone over and over the revenue doc's on this from my point of view and from yours.
And more points match what you are saying then what I am saying.
In saying that, I have never come across such a F****d up document. Its pretty obvious this document relates to EU law.
How do they expect anyone to get there head around this document!
PS just when you think you have them licked they get you again
- Status