I have a client who exports and imports goods, that part is ok with the VAT. The problem we have is hes hire a stand at a show in Germany, now the last time he did it Germany show charged us VAT at 19% and it took forever to reclaim it back. However he is doing the show again and has booked the stand accordingly but the booking is done through a UK company, he has been invoiced through the UK company although services will take place in Germany. They have charged him the German rate for VAT and told him to claim it back via lots of forms etc, via the German customs and Excise. We think this is wrong as they are a UK company shouldn't they be charging him UK VAT @ 20% as he is also a UK based company?
I am going to ring HMRC tomorrow as not sure from the Website and am getting abit comfused. He has phoned the company concerned and viewed his concerns and they have checked it out their end and are adament that he will need to claim the German rate of VAT back via the forms etc which is a long winded way of doing it and last time they didn't even pay it all back!!!
Is there anyone who can shed some light on this for me?
Any help will be as always greatly appreciated.
Many thanks
-- Edited by Amanda on Thursday 15th of September 2011 10:01:51 PM
If you buy an item or use a service abroad you have to pay their taxes even though you're not a resident. What makes you think you don't have to pay German VAT?
I'm not an expert on this, just getting all the facts to see if something I have learnt can help.
Also, what was the reason for nor getting the full amount refunded last time?
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Please correct me if I'm wrong... I am only human sucking up knowledge... Sometimes bits leak out!
The company concerned is a show event organiser who are british based but apparently if they have a German VAT number then they can charge us German VAT. I phoned HMRC today and thats what they said about it. The last time it took along time to get the money back was because they insisted on all the original invoices which my client sent in plenty of time, when he chased them for the money they then said they didn't have them, they had lost them, so they wouldn't accept photocopies, so he had to get copy invoices from germay again and by the time they came through and he submitted again they then said it was out of the time frame and therefore didn't pay or didn't pay all of it and he lost out. HMRC said today thats its all about the VAT number as a UK company can't charge German VAT is they do not have a number to put it against. I suppose its abit like someone uk based charging VAT but not actually being VAT reg.
I must admit I learnt something new today with this.
Anyway the long and the short of it is because of the VAT situation and the large costs involved hes decided not to do it.
I appreciate you've sorted this with your client, so sorry for hijacking your thread but I'm confused by HMRC's advice.
If I've read your post correctly a UK business is putting on a trade show / exhibition in Germany and another UK business is renting a stall. I don't quite follow why that isn't classed as a business2business supply and therefore subject to UK vat under the new rules. It's my understanding that the place of supply in this case is deemed to be where the customer resides not where the service takes place.
I know what you are thinking and myself and the client was thinking the same especially after getting caught out the time before, so this time before booking it we have looked into it. The company that its booked through is an agent, although UK based, I believe they deal alot as an agent for shows in Europe. I don't know how they have a German VAT number, my client checked it with them and they came back after checking with their financial people and said thats correct they have a German VAT number. I think its weird but that is why they are not charging us Uk to UK business, hence why my client isn't going to do the show over there now. He can't be bothered with all the paperwork to claim it back like last time and loose out as well. (My client is a UK based business).
The guy at HMRC who I must say was quite helpful, did say that if the invoice had a German VAT number on it then they had every right to charge us Germany rates for VAT and not UK rates. If by any chance there was a UK VAT number on it then it would have to be charged as normal and we claim it back in the normal way.
Its a weird one I know but I suppose at least we got to the bottom of it before spending out loads of money.
It is an HMRC link for checking the validity of VAT numbers from any EU area. If it legit, it will give you some basic details.
In your case select DE from the drop down member state list, and enter the VAT number, which should be 9 numbers.
If you look at the FAQ section to the left Q11 gives the structure of different country VAT numbers. Typically, the UK formats seem to be the most complex.
