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  • FIRST POST
    • ismail1980
    • By ismail1980 15th Oct 16, 12:01 AM
    • 22Posts
    • 1Thanks
    ismail1980
    An other VAT headache
    • #1
    • 15th Oct 16, 12:01 AM
    An other VAT headache 15th Oct 16 at 12:01 AM
    Guys
    Please help. I am not able to figure out this rule: https://ec.europa.eu/taxation_customs/sites/taxation/files/docs/body/moss_2016_uk_en.pdf

    So let me explain: I buy telecommunication cards (virtual telephone minutes) from Luxembourg company that charges me VAT and I sell them to marketing companies in India and Pakistan. Does this mean the company in Luxembourg should not charge me VAT because this service is being enjoyed outside EU? By the way I am not registered for VAT as my turnover is 20,000 GBP.

    This guide from HMRC is even more confusing: https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services/vat-notice-741a-place-of-supply-of-services

    Many thanks for all advice.
Page 1
    • zaax
    • By zaax 15th Oct 16, 12:18 AM
    • 1,666 Posts
    • 647 Thanks
    zaax
    • #2
    • 15th Oct 16, 12:18 AM
    • #2
    • 15th Oct 16, 12:18 AM
    No you should be reclaiming the VAT, apon evidence of export. Not VAT reg....
    Do you want your money back, and a bit more, search for 'money claim online' - They don't like it up 'em Captain Mainwaring
    • ismail1980
    • By ismail1980 15th Oct 16, 12:43 AM
    • 22 Posts
    • 1 Thanks
    ismail1980
    • #3
    • 15th Oct 16, 12:43 AM
    • #3
    • 15th Oct 16, 12:43 AM
    No you should be reclaiming the VAT, apon evidence of export. Not VAT reg....
    Originally posted by zaax
    How can I reclaim VAT without VAT number? I have no VAT registration. Thanks
    • Apodemus
    • By Apodemus 15th Oct 16, 6:43 AM
    • 297 Posts
    • 210 Thanks
    Apodemus
    • #4
    • 15th Oct 16, 6:43 AM
    • #4
    • 15th Oct 16, 6:43 AM
    Could you not voluntarily register for VAT if that would make things easier?
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 15th Oct 16, 11:33 AM
    • 1,927 Posts
    • 1,046 Thanks
    TheCyclingProgrammer
    • #5
    • 15th Oct 16, 11:33 AM
    • #5
    • 15th Oct 16, 11:33 AM
    If they are sending you physical goods then they would only be able to zero rate the supply to you if you provide them with a VAT number.

    If they are providing you with a service (which would include digital goods) then technically if its B2B transaction they should not normally be charging you VAT as the place of supply would be the UK but many EU companies insist on seeing a VAT number to prove its a B2B transaction (even though its not strictly necessary).
    • ismail1980
    • By ismail1980 15th Oct 16, 1:39 PM
    • 22 Posts
    • 1 Thanks
    ismail1980
    • #6
    • 15th Oct 16, 1:39 PM
    • #6
    • 15th Oct 16, 1:39 PM
    If they are sending you physical goods then they would only be able to zero rate the supply to you if you provide them with a VAT number.

    If they are providing you with a service (which would include digital goods) then technically if its B2B transaction they should not normally be charging you VAT as the place of supply would be the UK but many EU companies insist on seeing a VAT number to prove its a B2B transaction (even though its not strictly necessary).
    Originally posted by TheCyclingProgrammer
    Many thanks for this helpful advice. I am a sole proprietor and not sure if I can register for VAT with small turnover. I told to that company I can provide statements from customers abroad and provide their IDs and IPs. They still say no we shall charge VAT.

    Any other advice would be welcome.
    Thanks
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 15th Oct 16, 4:46 PM
    • 1,927 Posts
    • 1,046 Thanks
    TheCyclingProgrammer
    • #7
    • 15th Oct 16, 4:46 PM
    • #7
    • 15th Oct 16, 4:46 PM
    Many thanks for this helpful advice. I am a sole proprietor and not sure if I can register for VAT with small turnover. I told to that company I can provide statements from customers abroad and provide their IDs and IPs. They still say no we shall charge VAT.

    Any other advice would be welcome.
    Thanks
    Originally posted by ismail1980
    You didn't clarify if they are actually sending you something physical but it sounds like they are.

    Without a VAT registration number they are obliged to charge you VAT at their local rate.

    Any business can voluntarily register for VAT regardless of their turnover.
    • ismail1980
    • By ismail1980 15th Oct 16, 9:01 PM
    • 22 Posts
    • 1 Thanks
    ismail1980
    • #8
    • 15th Oct 16, 9:01 PM
    • #8
    • 15th Oct 16, 9:01 PM
    You didn't clarify if they are actually sending you something physical but it sounds like they are.

    Without a VAT registration number they are obliged to charge you VAT at their local rate.

    Any business can voluntarily register for VAT regardless of their turnover.
    Originally posted by TheCyclingProgrammer
    Thanks again. No they are not sending anything physical just virtual calling card codes.
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 15th Oct 16, 9:37 PM
    • 1,927 Posts
    • 1,046 Thanks
    TheCyclingProgrammer
    • #9
    • 15th Oct 16, 9:37 PM
    • #9
    • 15th Oct 16, 9:37 PM
    Thanks again. No they are not sending anything physical just virtual calling card codes.
    Originally posted by ismail1980
    In that case, if it is a digital good then it is considered a service. You need to provide them with some evidence that you are operating as a business and have purchased them for business purposes. If they accept it is a B2B transaction then they should have not charged you VAT.

    However, whilst you shouldn't need a VAT number for this to be the case, many companies think you need to have a VAT number in order to remove the VAT - this is not the case for services however unless you can convince them to treat it as a B2B sale with the place of supply being the UK you aren't going to get very far.

    If you register for VAT and then supply them with your VAT number they should remove the VAT when invoicing you. You will then need to handle these sales under the VAT reverse charge, where you account for the VAT yourself on your own VAT return.
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