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Where Taxpayers and Advisers Meet

VAT on exports to non-EU countries

sillycrab
Posts:5
Joined:Thu Jun 22, 2017 4:24 pm
VAT on exports to non-EU countries

Postby sillycrab » Thu Jun 22, 2017 5:06 pm

Hi all ,

I really need some advice on the VAT issues on exported goods to non-EU countries.
This is the first year of my business, I am based in the UK. I purchase luxury designer fashion items from UK and other EU countries and sell them to private customers in Asia.
As I export 100% outside the UK, I would like to know:
1. if I am entitled to reclaim input VAT or acquisition tax for the goods that I purchase?
2. For some goods that are purchased from online retailers, am I still able to reclaim VAT ?
3. I register VAT voluntarily in order to reclaim VAT but my turnover is below threshold, is it possible HMRC at some point de-register me?

I appreciate all helpful advice. :)

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT on exports to non-EU countries

Postby les35 » Fri Jun 23, 2017 10:10 am

1. yes, subject to holding proper VAT invoices.
2. yes, but you do need proper VAT invoices. If you buy from EU suppliers, that is a B2B transaction, and you will not be charged VAT.
3. not if you continue to make taxable supplies.

sillycrab
Posts:5
Joined:Thu Jun 22, 2017 4:24 pm

Re: VAT on exports to non-EU countries

Postby sillycrab » Fri Jun 23, 2017 10:42 am

1. yes, subject to holding proper VAT invoices.
2. yes, but you do need proper VAT invoices. If you buy from EU suppliers, that is a B2B transaction, and you will not be charged VAT.
3. not if you continue to make taxable supplies.

Hi les35,

Thank you for the advice ! I really appreciate that.
However, you've mentioned taxable supplies, does I mean I have to charge 20% VAT on the goods I sell to Asian customers?
For exports, I thought I need to zero-rate the goods ? Is zero-rated sales also considered taxable supplies ?
Apologies for my question, but I'm really new to this VAT thing.

Kind regards.

sillycrab
Posts:5
Joined:Thu Jun 22, 2017 4:24 pm

Re: VAT on exports to non-EU countries

Postby sillycrab » Fri Jun 23, 2017 11:55 am

1. yes, subject to holding proper VAT invoices.
2. yes, but you do need proper VAT invoices. If you buy from EU suppliers, that is a B2B transaction, and you will not be charged VAT.
3. not if you continue to make taxable supplies.

Sorry les35 ,

if I buy from EU online retailers who has an EU VAT registration number, for an instance DE xxxxxxxxx,
on the website it says the articles’ prices and shipping costs include VAT and are thus listed as gross prices.
Am I still able to reclaim VAT in this case ?

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT on exports to non-EU countries

Postby les35 » Fri Jun 23, 2017 4:24 pm

1. yes, subject to holding proper VAT invoices.
2. yes, but you do need proper VAT invoices. If you buy from EU suppliers, that is a B2B transaction, and you will not be charged VAT.
3. not if you continue to make taxable supplies.

Hi les35,

Thank you for the advice ! I really appreciate that.
However, you've mentioned taxable supplies, does I mean I have to charge 20% VAT on the goods I sell to Asian customers?
For exports, I thought I need to zero-rate the goods ? Is zero-rated sales also considered taxable supplies ?
Apologies for my question, but I'm really new to this VAT thing.

Kind regards.
Yes, zero rated sales are taxable supplies, which allows you to claim input tax without charging VAT.

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT on exports to non-EU countries

Postby les35 » Fri Jun 23, 2017 4:26 pm

1. yes, subject to holding proper VAT invoices.
2. yes, but you do need proper VAT invoices. If you buy from EU suppliers, that is a B2B transaction, and you will not be charged VAT.
3. not if you continue to make taxable supplies.

Sorry les35 ,

if I buy from EU online retailers who has an EU VAT registration number, for an instance DE xxxxxxxxx,
on the website it says the articles’ prices and shipping costs include VAT and are thus listed as gross prices.
Am I still able to reclaim VAT in this case ?
if you are registered for VAT only in the UK, you can only claim UK VAT. You cannot claim, in your case, German VAT.
When you buy in Germany, identify yourself as a business, provide your VRN. You then use the acquisition tax procedure.

And, spend an hour with your Accountant, or a VAT specialist, to work through these issues, so you properly understand them. Worth a modest fee today to avoid a huge assessment later!

sillycrab
Posts:5
Joined:Thu Jun 22, 2017 4:24 pm

Re: VAT on exports to non-EU countries

Postby sillycrab » Sat Jun 24, 2017 1:16 pm

1. yes, subject to holding proper VAT invoices.
2. yes, but you do need proper VAT invoices. If you buy from EU suppliers, that is a B2B transaction, and you will not be charged VAT.
3. not if you continue to make taxable supplies.

Sorry les35 ,

if I buy from EU online retailers who has an EU VAT registration number, for an instance DE xxxxxxxxx,
on the website it says the articles’ prices and shipping costs include VAT and are thus listed as gross prices.
Am I still able to reclaim VAT in this case ?
if you are registered for VAT only in the UK, you can only claim UK VAT. You cannot claim, in your case, German VAT.
When you buy in Germany, identify yourself as a business, provide your VRN. You then use the acquisition tax procedure.

And, spend an hour with your Accountant, or a VAT specialist, to work through these issues, so you properly understand them. Worth a modest fee today to avoid a huge assessment later!

Hi les35, thank you very much for all your advice !
You've helped me clear a lot of my doubts !
Appreciate it :)


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