My UK-based company subscribes to a service with a well-known American provider. In their invoice to us, they include a 20% tax charge which, of course, just happens to be the UK VAT rate. However, they explicitly say on the invoice, with an asterisk next to the tax line, "this is not a VAT invoice"
So why am I paying a 20% tax in dollars to an American company, and how can I recover it?
I used to work for a UK company that bought raw materials from our parent company in the US and no taxes were charged. It is possible that your supplier has applied a sales tax (specific to various states in the US) but I would contact them and query it. Just done a brief Google search and it seems that no tax should have been charged but I have not gone into it in depth. Another alternative is to phone the VAT helpline and ask them. It's possible you may be able to claim in back, but not sure.
You should contact them. I am thinking on the lines they might be registered for VAT in the UK and you have to ask for a VAT invoice? I am only saying that because I thought there is no VAT as such in the US so if they are writing the not VAT invoice thing it might means they are registered for VAT here.
I did call them and got a very ambiguous reply: first, the lady said that since we are a UK company, they have to tax. I asked her where exactly they put the money, to what government they report it, and how I can get it back. She told me that they are registered in the EU. I asked explicitly in what country so that when I get audited by the UK and show an invoice that says "not a VAT invoice" (with an American address), I can at least refer them to that information. She said she would escalate and get back to me in 1-3 days.
They should provide you with a VAT invoice if you ask for it.
It may be correct, as legally non EU companies who provide services in the EU must follow EU VAT rules so it does not disadvantage EU Companies who supply the same services in the EU and have to charge VAT. I was curious if non EU companies actually followed it, and if they did not how it would be enforced.
