istockphoto and VAT

[john_p]

Just bought some credits from istockphoto and they have charged me 17.5% VAT on the invoice

They are a Canadian company so why are they charging me VAT?

All there is on the invoice is a Canadian address.. I guess that means I can't claim it back..

anyone else had to deal with this ?

[Eric Mc]

Have they got a bona - fide UK VAT number?
Are they quoting a VAT number on their paperwork/web-site?

[john_p]

Eric Mc said:

Have they got a bona - fide UK VAT number?
Are they quoting a VAT number on their paperwork/web-site?

I can't find one anywhere. Nothing on the invoice.

e: actually it is termed Tax(17.5%) on the invoice, nothing to do with VAT. Maybe Canadian sales tax or something.. it's odd becase they asked for a UK VAT number when I registered.

Edited by john_p on Monday 26th April 13:35

[Eric Mc]

I had a quick look at Canada and VAT and they do have something like it called Government Sales Tax but the rate is not 17.5%.

Sometimes, a foreign business has to register for VAT in a country where its sales levels exceed the VAT registration threshold in that country.

I would ask them for their UK VAT number, if I were you.

[Simpo Two]

Perhaps it depends whether the credits are an 'export'? If they are bought in Canada and then redeemed in Canada, perhaps not?

Edited by Simpo Two on Monday 26th April 13:49

[lestag]

Eric Mc said:

Sometimes, a foreign business has to register for VAT in a country where its sales levels exceed the VAT registration threshold in that country.

Is that the case in the UK? and EU?

I am based in NZ and GST registered (similar to VAT). So long as the overseas company I worked for does not have an office in NZ, I don't charge GST. I never thought to charge any local (to overseas company) taxes. My revenue through these engagements has not been significant, so i doubt I would go over any local (to overseas company) VAT thresholds.

[Eric Mc]

lestag said:

Eric Mc said:

Sometimes, a foreign business has to register for VAT in a country where its sales levels exceed the VAT registration threshold in that country.

Is that the case in the UK? and EU?

Yes (the UK is part of the EU so the rules are the same here as in the rest of the EU).

[Four Cofffee]

I had a similar concern over another US based photostock library.

In the end I just assumed there was no VAT and didn't reclaim it, on the basis that HMRC might get angrier if I had reclaimed VAT I was not entitled to, but less so if I hadn't reclaimed it.

I have had a similar experience buying downloaded software etc from the US where the delivery is in the UK so should have a VAT elemen? But none seems to be mentioned. I showed it as a duty free import from outside the EU on my return which always triggered a letter from HMRC. In the end I stopped doing that and now just stick it in as not Vatable.

[Eric Mc]

Have you read what I said?

Foreign based operations are sometimes obliged to register for VAT in the UK (or other EU countries) if they sell substantial amounts of goods or services in that country. So they could very well be charging UK VAT legitimately. And, of course, if you are registered for VAT you should be able to reclaim that VAT if the purchase is for your business.

As I said earlier, find out the UK VAT registration number of the organisation you are buying from and, if you can verify that VAT number, you should be able to reclaim the Input VAT you were charged.

If you have systematically NOT reclaimed this VAT, it might be worthwhile going back over the various transactions to see how much VAT you might be entitled to reclaim.