Invoicing Europe - VAT question
Invoicing Europe - VAT question
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Discussion

andymadmak

Original Poster:

15,716 posts

300 months

Monday 4th June 2007
quotequote all
I have a client in Brussels that I will (hopefully) invoicing for some consultancy work soon.
I will be invoicing him in Euros at his Belgian address. He says I don't have to charge him VAT cos we are both in the EU, and we are both VAT registered. Is he correct?

Andy

David_s

7,960 posts

274 months

Monday 4th June 2007
quotequote all
If you get a valid VAT number from a customer in Europe then you do not have to charge VAT. No VAT number and you do have to charge. If you get the VAT number wrong you receive a letter from the non-compliance department asking you to correct the error, they do check.

andymadmak

Original Poster:

15,716 posts

300 months

Monday 4th June 2007
quotequote all
David_s said:
If you get a valid VAT number from a customer in Europe then you do not have to charge VAT. No VAT number and you do have to charge. If you get the VAT number wrong you receive a letter from the non-compliance department asking you to correct the error, they do check.
Many thanks beer

Eric Mc

125,763 posts

295 months

Monday 4th June 2007
quotequote all
The rules are different if you are supplying a "service" rather than "goods"?

Whether you charge VAT depends on the "place of supply of the service".

TheExcession

11,669 posts

280 months

Tuesday 5th June 2007
quotequote all
My Company is registered in Ireland and according to my accountant and the Companies in the UK that we supply services to or purchase services and goods off, so long as BOTH Comany's VAT numbers appear on the invoices then we can zero rate the VAT.

I can tell you having pratically a zero VAT liabillity is one of the most wonderfull things to be able to do to improve cash flow.

best
Ex

Eric Mc

125,763 posts

295 months

Tuesday 5th June 2007
quotequote all
Be very careful about the rules surrounding "Supply of Services". They are different to the rules regarding "Supply of Goods".

However, as stated previously, if both the supplier and the receiver of the services are VAT registered in their respective EU countries, it should be possible to Zero Rate the sales invoice, irrespective of where the Supply was made. You must quote your customer's VAT number on YOUR invoice (as well as your own VAT number).

Below is an extract from the VAT Notice regarding what is meant by "Place of Supply" when supplying an overseas customer..

1.6 What does “place of supply” mean for UK suppliers?
If the place of supply of your services is the UK, you must charge any UK VAT due and account for it to Customs and Excise regardless of where your customer belongs. If the place of supply of your services is another member State, you or your customer will be liable to account for any VAT due to the tax authorities of that country.

Where the place of supply of your services is outside the UK, you should ensure that your records demonstrate that your supplies are eligible for such treatment.

StuMartin

1,706 posts

267 months

Tuesday 5th June 2007
quotequote all
Indeed. So a good starting point would be to define what the services are, and what they relate to. For example, consultancy services in relation to the renovation of a building located in the UK (and owned by the Belgian business) may attract a different answer to consultancy services related to organising a conference in Spain.

andymadmak

Original Poster:

15,716 posts

300 months

Tuesday 5th June 2007
quotequote all
sooooo, if I supply business development consulting services to a company in Belgium and I have their VAT number, and its for business they are not doing in the UK, I don't have to charge VAT. right? (even if I actually write some of the stuff in my office in the UK)

Andy

Edited by andymadmak on Tuesday 5th June 17:00

Eric Mc

125,763 posts

295 months

Tuesday 5th June 2007
quotequote all
That's the way I would interpret it.

I would strongly advise checking this out with your accountant.

andymadmak

Original Poster:

15,716 posts

300 months

Tuesday 5th June 2007
quotequote all
Eric Mc said:
That's the way I would interpret it.

I would strongly advise checking this out with your accountant.
OK, will do. Thanks Eric.

StuMartin

1,706 posts

267 months

Wednesday 6th June 2007
quotequote all
Eric Mc said:
That's the way I would interpret it.

I would strongly advise checking this out with your accountant.
As always, check with someone on a professional basis. He may want you to put a little legislative reference on your invoice. Also, I believe that, rather than simply not charging VAT, you are charging it at a zero rate...because presumably you may want your input tax back, providing it's recoverable, natch wink