I would appreciate some guidance on how to handle a European VAT invoice, which I've not dealt with before.
My client is a small retailer and has bought some stock from Denmark. The invoice specifies that VAT at 25% has been paid.
How does this enter this invoice on QuickBooks and where does should it sit on the VAT100? When I enter the invoice as a euro purchase on QuickBooks (tax code EGS) it calculates output tax on the gross value of the invoice in box 2 and as the gross amount paid purchase in box 9 - meaning she's paying VAT in Denmark and again here. I don't think this is correct?
If your client has paid Danish tax then it goes in as Out of Scope O because as tax has been paid in Denmark HMRC aren't interested in it as no VAT is due on it in the UK as tax has been paid in another EU country. In that case it would not appear on the VAT100 report. It is more hassle than it is worth to try to reclaim the Danish tax.
If on the other hand he is VAT registered he should have provided his VAT number to the supplier and it should be on the invoice that he did not pay Danish tax in which case he would have to use the relevant EU code in QuickBooks.
I have since discovered that my client had not passed on her VAT number to the supplier which is why she had been charged VAT in the first place. So all sorted. Thanks
