Place of Supply - Multiple Establishments

[shooter782]

A supplier is making B2B general rule services. The head office of the customer (a company) is located in the UK (contracts are addressed to the head office, instructions/correspondence are obtained from/sent to the head office and the directors live in the UK and work out of the head office).

However, the company itself is incorporated in the Republic of Ireland (ROI) with an ROI registered office (albeit that this is simply a correspondence address) and the company's business (restaurants) is entirely located in the ROI.

For the purposes of the the place of supply rules, does the customer belong in the UK or ROI?

Many thanks

[Kitty Kat]

Per http://www.hmrc.gov.uk/vat/managing/international/exports/services.htm#2

Is your place of belonging in the UK?

You belong in the UK if:

your business establishment (your head office or only office) is in the UK, and you have no fixed establishments (subsidiary offices or agencies) in other countries
your business establishment is in the UK and you have fixed establishments in other countries, but the UK office is the one mainly concerned with supplying services
your business establishment is not in the UK but you have a fixed establishment here which is the one from which you supply services
you don't have either a business or fixed establishment in the UK or elsewhere, but your business is a corporate body (eg, a limited company) which is registered in the UK
you have don't have a business or a fixed establishment in the UK, or anywhere else, but the UK is your usual place of residence

A business can have only one business establishment, but can have several fixed establishments.

So I'd say yes, it is a UK business for VAT. Interesting that the place of incorporation is irrelevant, or at least it is to me

[spidersong]

Kitty,

Isn't there a potential problem with the one you've highlighted as the Business establishment is in the UK, but it does have fixed establishments in other countries and it's actually these fixed establishments that are primarily concerned with the supply of services?

Which also means that the second point doesn't apply, and since the business establishment is in the UK nor do the other ones.

So I'd say generally their place of belonging is in the ROI, however that doesn't necessarily mean that all supplies would have a place of supply in ROI.

Going back to the law; VATA 94, Section 9 defines where people belong for VAT purposes sub 3 says if they only have an establishment in one country that they belong in that country, if they have more than one establishment then you look at the relevant establishment, which is the one most concerned with the supply (sub 4).

So the supplier needs to decide which of the establishments are most concerned with their supply. So if they're doing a consultancy report on whether a restaurant in Cork can succesfully offer fried haddock on a Thursday, then I'd say the restaurant in Cork is most concerned with the supply, if it covers the whole restaurant estate though then it may indeed be head office, likewise any accountancy work etc. could be seen as for the head office. So I'd say it depends on what the services actually are, and whether they're of specific benefit to one establishment or to the corporate entity.

That's strictly how I'd look at it, but of course if you've got a UK business, invoicing a UK business, charging UK VAT, with a description of 'consultancy' or something like that then I can't see anyone feeling that great a need to pick apart the report, or whatever there may be, and weigh up whether a particular restaurant is more involved with it than the others etc. So in most general rule circumstances (i.e. those that don't involve land based services, or physical performance) where the head office is contracting I'd expect to see the place of supply treated as the UK.

[Kitty Kat]

Kitty,

Isn't there a potential problem with the one you've highlighted as the Business establishment is in the UK, but it does have fixed establishments in other countries and it's actually these fixed establishments that are primarily concerned with the supply of services?

Which also means that the second point doesn't apply, and since the business establishment is in the UK nor do the other ones.

So I'd say generally their place of belonging is in the ROI, however that doesn't necessarily mean that all supplies would have a place of supply in ROI.

Going back to the law; VATA 94, Section 9 defines where people belong for VAT purposes sub 3 says if they only have an establishment in one country that they belong in that country, if they have more than one establishment then you look at the relevant establishment, which is the one most concerned with the supply (sub 4).

So the supplier needs to decide which of the establishments are most concerned with their supply. So if they're doing a consultancy report on whether a restaurant in Cork can succesfully offer fried haddock on a Thursday, then I'd say the restaurant in Cork is most concerned with the supply, if it covers the whole restaurant estate though then it may indeed be head office, likewise any accountancy work etc. could be seen as for the head office. So I'd say it depends on what the services actually are, and whether they're of specific benefit to one establishment or to the corporate entity.

That's strictly how I'd look at it, but of course if you've got a UK business, invoicing a UK business, charging UK VAT, with a description of 'consultancy' or something like that then I can't see anyone feeling that great a need to pick apart the report, or whatever there may be, and weigh up whether a particular restaurant is more involved with it than the others etc. So in most general rule circumstances (i.e. those that don't involve land based services, or physical performance) where the head office is contracting I'd expect to see the place of supply treated as the UK.

Gahh I need to read these things properly! I managed to take in every aspect of the question except for the fact all the restraunts are in Ireland! Spidersong I am in your debt for your correction (not for the last time I imagine!)

[Generix]

A supplier is making B2B general rule services. The head office of the customer (a company) is located in the UK (contracts are addressed to the head office, instructions/correspondence are obtained from/sent to the head office and the directors live in the UK and work out of the head office).

For the purposes of the place of supply rules, if both contract address and the instructions come from the same place (and that place is a VAT fixed establishment) then that is the place of supply.