EU / UK vat questions

[KMP]

Hello,
Looking for some direction with EU vat please.
I will be invoicing a business in Holland for approximately 18000€ over the next year. This is for services provided (on a commission basis.) I will be invoicing out of the UK for a UK registered company.
We are VAT registered in the UK and are on a flat scheme at the moment.
confused in the UK,
Kalpana

[Balmain]

Dear KMP

See Notice 733 para 12.3 and then 7.2...quote:

As exempt and zero-rate supplies are included in flat rate turnover you apply the flat rate percentage to the exempt and zero rate turnover. You may pay more VAT by being on the scheme if these supplies are a larger proportion of your business turnover than the average for your trade sector.

Balmain

[vatexpert]

The first thing you must do is establish the place of supply of your services. This is determined by the nature of the service supplied and you can find the place of supply by referring to VAT notice 741, although I would strongly advise you to seek guidance from a VAT specialist as international services is a very tricky area of tax.

If the service is outside the scope of UK VAT, there will be no VAT due and the income can be omitted from your turnover for the purposes of the flat rate scheme.

Joe Wilkins
www.vatexpert.net

[Balmain]

Services outside the scope of UK VAT is a different matter. KMP didn't indicate this.

Balmain

[KMP]

Thanks for the speedy responses.
Essentially, we are a UK company that does outsourced hotel accomodation contracting for International airlines.
In this instance, the Airline is based in Canada and the Hotel in Amsterdam. The hotel invoices the airline and we invoice the hotel.
Hope this helps?
Thanks,
KMP

[Paul Taylor]

From the brief information you have provided it would appear that your services are either:

1) The services of an intermediary deemed to be supplied where the main supply occurs (i.e. Holland where supply of hotel accommodation occurs); or
2) Marketing / Promotional services deemed to be supplied where your customer belongs (i.e. Holland).

Therefore, they appear to be outside the scope of UK VAT.

Regards,

Paul Taylor
Senior VAT Consultant
www.dains.com

[rup]

Hi,
I don't know whether this comment requires a different thread or whatever, but I feel that it concerns the EU/UK VAT situation and may add ot understanding of particular situations.
SWe have a co. in the UK, and a branch in Italy. The Italian co. works for other Italian companies. Can we invoice using the UK VAT number for the Italian company? Someone told us not, because Italian VAT is territorial, but another person said that he had heard of Italian brnahces doing this.

Many thanks,
Best regards,
Rupert.

[vatexpert]

Rupert

As a general rule, where a company is established or has a place of business in different EU member states, it is the one most directly connected with the particular supply that is treated as the supplier. Therefore, if it is the Italian branch that is most directly connected, then you can't use the UK VAT number.

Joe Wilkins
www.vatexpert.net

[Daniya]

Hi

I am going to put my spanner in the tread...I think the ans is very simple and its being confused by different place of supply.

The company is UK based, therefore it is invoicing the hotel in Amsterdam. If the hotel supplies the UK company with its VAT registration details, then the UK company does not need to charge VAT. The only draw back is that the UK company is on Flat rate, therefore I would advise the UK company to check with the vat office if they should charge VAT on their Invoice or not. I think they will not be charging VAT and it will be shown in BOX 8(SUPPLY TO EU..i think that is the right box.

Rana

[rup]

Tx. Joe,
I thought that was the case, but one can but hope. :)
On another note, can anyone tell me why Switzerland charges VAT at 7.5%. That are not in EU.
Rupert.