We are selling some works of art which are being producted in italy and then sent direct to the buyer in italy. Our company is UK based and VAT registered. The buyer is italy vat registered. Can we still remove the VAT from the buyers invoice if we do not have evidense of removal from UK - as the product will be delivered straight from manufacturer to the buyer without coming to the UK?
If anyone knows if there is a VAT loop hole for sales such as this please let me know,
It does not matter any more. They changed the rules to include things not removed from UK (e.g. Services) so they use the same rules.
Technically you are providing a EU service by supplying Goods in the EU to another EU country. (It does not matter if they are the same EU country, as now we have the right to be registered in any EU country we wish for VAT purposes, instead of the old system, where we may have had to register in each country!). So as you have the buyers VAT number you don't charge VAT and they account for VAT using the reverse charge accounting. If the buyer was not VAT registered you woul have had to charge UK VAT.
Actually, you have triggered a place of supply in Italy as the goods rules are relevant here , not the services rules. Potentially you need to get registered for VAT in Italy and charge Italian VAT. If you're desparate to avoid that an (expensive work-around is to bring the goods to the UK and then sell them from here to the customer in Italy and send them back!
Actually, you have triggered a place of supply in Italy as the goods rules are relevant here , not the services rules. Potentially you need to get registered for VAT in Italy and charge Italian VAT. If you're desparate to avoid that an (expensive work-around is to bring the goods to the UK and then sell them from here to the customer in Italy and send them back!
No - the rules changed on 1 January 2010.
You no longer need to be registered in different EU countries! You choose the country you are registered and apply the rules for that country. Obviously you choose to be registered in the UK for convenience. How you treat the VAT is dependant on if its a Businesss to Business Transaction (they give you a VAT number and they apply the reverse VAT charge accounting) or Busines to Consumer Transaction, and they have to pay UK VAT on the sale.
I used to work for a manufacturer and we used to send stuff from one EU country to another without any of it coming near the UK. (We also provided services too, as we had services engineers, some UK based, but not all). I left before the changes came into being, but a attended lots of HMRC held VAT seminars on this to prepare us in advance before the deadlines for the rules to start.
The changes also brought Services under the same rules as Goods, as prior to 1 January 2010 they were treated differenlty.
-- Edited by YLB-HO on Friday 8th of July 2011 02:16:01 PM
