Commercial Sales to EU Business & VAT
Discussion
Been looking at a UK business website that manufactures knock sensor kit.. Won't linky in case the mods. descend upon me..
This is their stated policy to EU busineses:
Companies purchasing our goods from countries within the European Union (excluding the UK) may enter their company VAT number during the Checkout/Payment process.
Once we have validated your VAT number and company details we will remove the VAT from the order and include an adjusted invoice with the goods.
I thought all sales within the EU by VAT registered businesses have to have VAT charged at the appropriate rate and where possible, is claimed back by the buyer?
Since no duty or VAT is payable on imports between EU countries, surely this will result in the VAT registered businesses within the EU paying no VAT on the purchase?
This is their stated policy to EU busineses:
Companies purchasing our goods from countries within the European Union (excluding the UK) may enter their company VAT number during the Checkout/Payment process.
Once we have validated your VAT number and company details we will remove the VAT from the order and include an adjusted invoice with the goods.
I thought all sales within the EU by VAT registered businesses have to have VAT charged at the appropriate rate and where possible, is claimed back by the buyer?
Since no duty or VAT is payable on imports between EU countries, surely this will result in the VAT registered businesses within the EU paying no VAT on the purchase?
At one point (1993) the EU Commissioners hoped that they could introduce a system whereby traders in different EU countries could reclaim Input VAT incurred by purchases from traders in other EU countries. However, they found that the implementation of this would be a bureaucratic nightmare. Imagine the complexity of having to submit a VAT return to each of the countries your different overseas suppliers were based to try and get the VAT back they had been charged.
The EU's plan would have bben for a UK trader to reclaim (say) Italian VAT on their UK VAT Return and then the UK government would reclaim the Italian VAT they had repaid to UK businesses from the Italian government.
Now, apply that over 27 different countries - all with different VAT rates and regulations and you have one big mess.
15 years after it this scheme supposed to have been introduced it still hasn't - and I reckon it never will - at least not in my lifetime.
The EU's plan would have bben for a UK trader to reclaim (say) Italian VAT on their UK VAT Return and then the UK government would reclaim the Italian VAT they had repaid to UK businesses from the Italian government.
Now, apply that over 27 different countries - all with different VAT rates and regulations and you have one big mess.
15 years after it this scheme supposed to have been introduced it still hasn't - and I reckon it never will - at least not in my lifetime.
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