I wanted to confirm my understanding of the VAT rules of selling goods to EU is correct.
If a UK VAT registered business sells goods within the EU (B2B) the VAT is reverse charge, you then may need to register for VAT in Countries if you breach the limits. If you register in a Country and goods are still shipped from UK, the sales B2B are still reverse charge but if you warehouse in the Country, let us say Germany, do you then charge that Country VAT on German B2B sales as well as sales to non registered individuals? IE German B2B sales are no longer reverse charged but VAT is charged at German rate for purchaser to re claim in Germany?
Hope that makes sense..the point I need clarifying is place of supply I guess!
I think this is my
answer..it appears it is place of supply, which would be Germany if we warehouse there, so I WOULD charge German VAT on German B2B sales...
Apologies, it is a UK VAT registered company, they previously registered for VAT in Germany as they breached the threshold. However, they now have a warehouse in Germany too, previously everything was shipped from the UK.
My confusion is that all sales are now distributed to Germany from our German warehouse, as I said, previously they were sent from the UK, so all German Sales were reverse charged for B2B. Does the fact that they are now distributed from Germany NOT the UK mean that I can't reverse charge German B2B sales?
UK Company selling online- Registered for UK VAT. All stock held in UK and distributed from UK. (All EU B2b sales reverse charge) Had to register for German VAT as we breached the sales threshold. Then we set up a warehouse in Germany to distribute across the EU from Germany. We send stock over from the UK.
Does this change the German B2B sales as they are now distributed from Germany not the UK?
-- Edited by tonys on Monday 15th of October 2018 12:36:23 PM
-- Edited by tonys on Monday 15th of October 2018 12:37:13 PM
We verify B2B sales by taking the VAT number and verifying it.
I couldn't get hold of our Accountant yesterday and tried to find the answer online. The Company have basically sent stock out to a warehouse in Germany to speed up distribution in Europe but I was concerned that the SUPPLY of the goods was then from Germany hence within Germany would I still be able to reverse charge B2B sales.
And just to confirm, I am a bookkeeper, not a business owner looking for free advice!! I haven't been on the site for some time and I noted some pretty rude people posting on here. I remember starting in bookkeeping around 5 years ago, the advice and replies I got on here were really helpful.
Just to close this post, I spoke to the Accountant today and The Company do need to charge German VAT for German B2B sales from the German warehouse. Although the online sale is UK, the place of supply is from their German warehouse.
I have also recently noticed a couple of invoices for goods received from UK VAT registered businesses that have arrived with no VAT, on closer inspection, they have warehousing in the EU (Possible to Brexit proof??) and the place of supply has been their EU warehouse hence the reverse charge on the VAT.
I have enjoyed catching up with the posts (well, some of them! Most people would have dropped off reading this!) here and will be checking in more regularly.
I have enjoyed catching up with the posts (well, some of them! Most people would have dropped off reading this!) here and will be checking in more regularly.
Good to hear. We need more contributors.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
UK Company selling online- Registered for UK VAT. All stock held in UK and distributed from UK. (All EU B2b sales reverse charge) Had to register for German VAT as we breached the sales threshold. Then we set up a warehouse in Germany to distribute across the EU from Germany. We send stock over from the UK.
Does this change the German B2B sales as they are now distributed from Germany not the UK?
-- Edited by tonys on Monday 15th of October 2018 12:36:23 PM
-- Edited by tonys on Monday 15th of October 2018 12:37:13 PM
Hi Tony
Sorry, been off the grid for a few days and probably Monday wasnt the best time to respond to you given I had a funeral that day. That said the bits that got me were:-
You mentioned having to register with the Germany authorities due to being over the threshold, but advised all your sales were B2B. Im presuming you mean the distance selling threshold - which doesnt apply if its all B2B.
Plus - I found it surprising that the warehouse had been set up without you knowing how it would all work. In part hence why I asked the what does the Accountant say (although with all the business owners on here, I admit part was in relation to that too). But mainly because I wonder why so many bookkeepers are treated like mushrooms by their clients - bloody infuriating as this aspect clearly should have been scoped out by your client alongside his Accountant, with you firmly in the planning at some stage BEFORE the warehouse is opened.
Anyway - both of those are moot now.
Only other thoughts were
- in relation to the legal status of the ownership of the warehoused business - I am assuming it is the UK company that owns it and no subsidiary/group company has been set up.
other assumptions
- the warehouse in Germany is not bonded.
- no consignment stocks involved
- all of the goods in the German warehouse have been dispatched from the UK
My view:-
- I agree in this instance the place of supply (goods) is Germany.
- German vat (USt or MwSt) rate (cheaper than here) is to be added to all invoices to clients in Germany as the reverse charge process no longer applies. Invoices for goods shipped from Germany to other Euro destinations eg France, fall under reverse charge on German VAT return.
- Do get an appropriately qualified professional in Germany lined up for any issues/checking returns or filing them and/or just dealing with the German tax authorities as and when you need them. When they clamp down, they clamp down hard. Also ensure you have an interpreter as they sometimes refuse to translate letters, albeit they are bloody good at responding and much quicker than HMRC.
- How have you you dealt with the transfer of the company's own stocks to Germany for VAT? You need to consider acquisition VAT in Germany, but technically it can be done at zero rated. Take a look at section 9 of the VAT notice 725 for starters.
When we know about Brexit in a bit more detail I would suggest you get an international trade specialist on board to go through further options as the EU warehousing will not protect you fully if the current plans go ahead (but who knows what they will end up being/when/how/if! But bonding might be an idea as a start.
Am sure there was one other point but its gone out of my head. Oops.
Apologies for any typos - glasses in handbag....somewhere.
Yes, lots of rude folk on here recently. In fact lots of ghosts who post Qs and then disappear. Or just narcassits! I agree with John.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I appreciate the detail of the reply, we have a VAT specialist dealing with the future registrations now as we are going to breach several more.
Tha Accountants had advised on how the VAT would worked but I wasnt kept in the loop ( mushroom) I prefer to try and check HMRC website than pay for e mails to the Accountants TBH. I was fairly sure I was right but was just hoping someone else had experience in this.
Will be checking in more regularly moving forward.
Tony
