VAT applied to goods manufactured in another member state.

[yellowplum]

I have been trying to figure out exactly were supply of goods takes place and wanted to clarify with anyone who could explain a little deeper.

A manufacturer in Poland is making some items for us (we are both VAT registered). However they have recently tried to set up a subsidiary in the UK and registered here for VAT. However, my confusion lays with where the goods are coming from and were the tax point should be.

If the goods are made in Poland and delivered to us directly, without going to the subsidiary does that mean they should be invoiced and taxed from Poland, or are they liable to UK vat (since they began UK registered as a separate entity).

This is what is confusing me slightly, if you have a Limited Company in the UK and a company in Poland, but the Polish company is making the goods and supplying them to me directly where is the VAT liability for invoicing? Since the goods are not located in the UK at the time of invoicing.

[les35]

B2B supply of goods: Place of Supply is where recipient belongs. The recipient must provide the supplier with his VAT number.
The UK recipient accounts for UK VAT using the Acquisition Tax procedure.
The non-involvement of the UK-based subsidiary seems to be a red herring!

[Lavender2306]

B2B supply of goods: Place of Supply is where recipient belongs. The recipient must provide the supplier with his VAT number.
The UK recipient accounts for UK VAT using the Acquisition Tax procedure.
The non-involvement of the UK-based subsidiary seems to be a red herring!

Sorry, les, but B2B rule applies only to services.
For the rules for place of supply of goods please read VATA 1994, s7.

[Lavender2306]

I have been trying to figure out exactly were supply of goods takes place and wanted to clarify with anyone who could explain a little deeper.

A manufacturer in Poland is making some items for us (we are both VAT registered). However they have recently tried to set up a subsidiary in the UK and registered here for VAT. However, my confusion lays with where the goods are coming from and were the tax point should be.

If the goods are made in Poland and delivered to us directly, without going to the subsidiary does that mean they should be invoiced and taxed from Poland, or are they liable to UK vat (since they began UK registered as a separate entity).

This is what is confusing me slightly, if you have a Limited Company in the UK and a company in Poland, but the Polish company is making the goods and supplying them to me directly where is the VAT liability for invoicing? Since the goods are not located in the UK at the time of invoicing.

Where the goods move from one EU country to another we are talking about cross border VAT.
I am not going into place of supply of goods rules.
I will explain the VAT treatment in your scenario:
Goods are produced in Poland and sold by a vat registered supplier to a uk vat registered customer.
The supplier invoices the uk customer and shows in the sales invoice the customer's vat number.

The VAT treatment should be as follows:
The polish supplier zero rates his supply in his accounting records.
The uk customer is obliged to account for acquisition VAT, which means he accounts for output UK VAT and also, as long as he has evidence, a valid vat invoice from the supplier, he can account for input UK VAT.
The overall affect is that the uk customer doesn't suffer any VAT.
But these accounting records are a must.

With regards to the tax point, it is the date of the invoice or 15th of the month following the supply whichever is earlier.