Question for you this morning - im not very knowledgeable around VAT with regard to importing goods and I am looking for some help!
My client is importing an item from a VAT registered company in Romania - they plan to then sell on to a VAT registered company in the UK - the client themselves is not yet VAT registered.
The company in Romania have given them a figure in Euros for the cost of the item but have said the invoice will be sent with no VAT added but they have said that VAT charged in Romania is 24% on everything - so therefore would they have to add this 24% on to the goods before sending to the UK?
Also when my client receives the goods I understand they obviously will not add VAT on as they are not VAT registered - therefore if VAT is added on in Romania im presuming that they cannot claim this back?
Quite confused and I have advised speaking directly to HMRC but I would like a little knowledge myself if anyone has any dealings with this!
My understanding of eu dispatches is that a vat registered businees supplying goods to a non vat registered entity in another ec country should charge vat at the supplier's country's applicaple vat rate.
richard2013 is correct, the Romanian company should charge VAT and it should be shown on their invoice. torraci, yes you are right, your client will have to suffer the VAT as they cannot reclaim it as they are not VAT registered and they cannot charge their customer VAT. So, your client will need to take the total cost (including VAT) into consideration when they work out their selling price.
I've seen a Hungarian supplier not charging Hungarian Vat on a supply of transport service to a Uk non-vat registered sole trader. Talk about people making mistakes! I understand however that vat can be very complicated.
