quick question about europeans buying in the UK
Discussion
does anyone know what tax or import duties a mate in Germany would have to pay if he buys parts from someone like Demon Tweeks ?
My understanding is he wouldn't pay VAT at 17.5 % asa this is a tax on UK people and not Germans . So if thats correct , would he have to pay import duties or some other tax when importing into Germany? Item cost is only about £160.
Cheers
My understanding is he wouldn't pay VAT at 17.5 % asa this is a tax on UK people and not Germans . So if thats correct , would he have to pay import duties or some other tax when importing into Germany? Item cost is only about £160.
Cheers
VAT is quite complicated but, here goes -
German ordinary individual buy goods in UK which have VAT on them - he pays the full price including the VAT. He cannot get the VAT refunded to him. In other words, he pays the same for the goods that an ordinary UK citizen would pay.
German VAT registered business buys the same goods in the UK - because the German business is VAT registered, they can ask the UK supplier to Zero rate the goods and therefore the German business will buy the goods at the VAT exclusive price. In other words, he ends up paying the same that a UK VAT registered business would, because the UK business would claim the VAT element back from the UK HM Customs and Excise.
These are the rules for selling goods to customers in other EU countries.
If the customer is from a country outside the EU and will shortly be leaving the UK, whether he is in business or not, he can ask the supplier to Zero rate the item. If he was unable to get the item Zero rated at the point of sale/supply, he can ask Customs and Excise to refund him the VAT when he is on the point of leaving the country. Most ports and airports have a VAT office where these claims can be made.
As I said, complicated.
German ordinary individual buy goods in UK which have VAT on them - he pays the full price including the VAT. He cannot get the VAT refunded to him. In other words, he pays the same for the goods that an ordinary UK citizen would pay.
German VAT registered business buys the same goods in the UK - because the German business is VAT registered, they can ask the UK supplier to Zero rate the goods and therefore the German business will buy the goods at the VAT exclusive price. In other words, he ends up paying the same that a UK VAT registered business would, because the UK business would claim the VAT element back from the UK HM Customs and Excise.
These are the rules for selling goods to customers in other EU countries.
If the customer is from a country outside the EU and will shortly be leaving the UK, whether he is in business or not, he can ask the supplier to Zero rate the item. If he was unable to get the item Zero rated at the point of sale/supply, he can ask Customs and Excise to refund him the VAT when he is on the point of leaving the country. Most ports and airports have a VAT office where these claims can be made.
As I said, complicated.
That's not fraud - that's mormal legitimate importing - for a UK VAT registered business.
And of course, if the UK VAT registered business sourced its PC processors from a UK supplier, whatever VAT charged on the sale by the supplier could be claimed back by the UK VAT registered business.
As you can see, the idea of suppliers in EU countries Zero rating their sales to VAT registered customers in other EU countries is actually designed to try and create a level playing field throughout the EU.
And of course, if the UK VAT registered business sourced its PC processors from a UK supplier, whatever VAT charged on the sale by the supplier could be claimed back by the UK VAT registered business.
As you can see, the idea of suppliers in EU countries Zero rating their sales to VAT registered customers in other EU countries is actually designed to try and create a level playing field throughout the EU.
Just an additional note to remind people that, in VAT regulations, there is a fundamental difference in the way VAT is accounted for on transactions between suppliers selling to customers inside the EU and suppliers selling to customers outside the EU. And, of course, it must be remembered that a fair chunk of European countries, states and principalities are not part of the EU.
VAT is an extremely complicated tax with lots of detailed exeptions and exemptions.
One of the peculiarities about motor cars is that the VAT charged on the supply of a motor car is, in the vast majority of cases, totally irrecoverable from the VAT authorities. In other words, motor cars are treated very differently to normal goods and services.
In this case, I am talking about transactions between a UK based supplier and a UK based customer.
If you are a UK based customer who decides to buy a motor car from a supplier in another EU country (like Denmark) then the normal rules would apply i.e. - if you are an ordinary individual or a trader who is not VAT registered, you would be charged the normal Danish VAT on the cost of the vehicle.
If you are a VAT registered UK customer, you could ask for the Danish supplier to Zero Rate the sale of the car to you, but UK HM Customs and Excise will slap 17.5% on the car at the point of import which you will have to pay them before the car is released to you.
As you can see, it's the "level playing field" scenario again - they are trying to ensure that British car dealers are not disadvantaged by putting overseas dealers in a favourable position.
One of the peculiarities about motor cars is that the VAT charged on the supply of a motor car is, in the vast majority of cases, totally irrecoverable from the VAT authorities. In other words, motor cars are treated very differently to normal goods and services.
In this case, I am talking about transactions between a UK based supplier and a UK based customer.
If you are a UK based customer who decides to buy a motor car from a supplier in another EU country (like Denmark) then the normal rules would apply i.e. - if you are an ordinary individual or a trader who is not VAT registered, you would be charged the normal Danish VAT on the cost of the vehicle.
If you are a VAT registered UK customer, you could ask for the Danish supplier to Zero Rate the sale of the car to you, but UK HM Customs and Excise will slap 17.5% on the car at the point of import which you will have to pay them before the car is released to you.
As you can see, it's the "level playing field" scenario again - they are trying to ensure that British car dealers are not disadvantaged by putting overseas dealers in a favourable position.
Eric Mc said:
If you are a VAT registered UK customer, you could ask for the Danish supplier to Zero Rate the sale of the car to you, but UK HM Customs and Excise will slap 17.5% on the car at the point of import which you will have to pay them before the car is released to you.
That's the bit that has me confused.
I'm not VAT registered and all the Danish tax office wanted was documentary evidence that I was registered to pay tax elsewhere in the EU than Denmark.
If you had to be VAT registered in order to avoid paying local taxes in other EU member states, surely it would kill off the parallel import market (except for businesses) overnight?
As I said, VAT regulations are extremely complex. Maybe there are special rules relating to the importation of "Motor Cars" from other EU countries which are different to the imporatation of other forms of goods. Or maybe the Danish car dealer got it wrong.
Did you have to pay VAT to the UK customs people before you could take posession of the car?
Don't forget that car imports are also subject to UK taxes and duties which are not part of the VAT equation at all. Maybe that was the element of "Import Taxes" that the Danish car supplier removed.
Did you have to pay VAT to the UK customs people before you could take posession of the car?
Don't forget that car imports are also subject to UK taxes and duties which are not part of the VAT equation at all. Maybe that was the element of "Import Taxes" that the Danish car supplier removed.
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff