If supplying a service to an EU business rather than goods, do we need to quote the customers VAT number on the invoice, as is specified for goods ?

Question

If supplying a service to an EU business rather than goods, do we need to quote the customers VAT number on the invoice, as is specified for goods?

This question was asked during our VAT Fundamentals webinar. You can watch the webinar at http://opentoexport.com/info/webinars/#VAT_fundamentals

Answer

Hi Theresa,

there are different VAT treatments which apply to services depending on whether the supply is to a business customer or a consumer. One determining factor as to whether they are a business is that they are VAT registered. So if it is a service to be treated under the General Rules for a B2B supply quoting the VAT number on your sales invoice will be important.

VAT rules on services are more layered that on goods so you need to be clear on not just the nature of your customer but also the type of service being supplied.

It may be that we will run a services VAT session if the interest is there. For general VAT information check out our site as well : www.centurionvat.com to register for our Free VAT Newsletter

Regards, Liz

Answer

The obligation to provide a VAT invoice for intra-EC supplies is covered by VAT Regulations 1995, regulation 13(1)(b). The details which must be shown on an invoice are listed in VAT Regulations 1995, regulation 14(2). For intra EC supplies this includes the registration number, if any, of the recipient of the supply of goods or services and the alphabetical code of the Member State in which that recipient is registered.

Specifically for services, to satisfy yourself that you are making business to business supplies (B2B) you should obtain commercial evidence showing that your customer belongs outside the UK and does not receive your supply for a wholly private purpose. VAT registration numbers are the best evidence that the supply is not received for a wholly private purpose and should be requested. If your customer is unable to provide a VAT number, you can accept alternative evidence. This includes certificates from fiscal authorities, business letterheads or other commercial documents indicating the nature of the customer’s activities. Such evidence should be kept as part of your records. Where VAT numbers are available, they should be shown on your invoice. Please refer to VAT Notice 741A – Place of supply of services.  https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services

HM Revenue & Customs

Customs International Trade & Excise

www.hmrc.gov.uk/contactus

Answer

The obligation to provide a VAT invoice for intra-EC supplies is covered by VAT Regulations 1995, regulation 13(1)(b). The details which must be shown on an invoice are listed in VAT Regulations 1995, regulation 14(2). For intra EC supplies this includes the registration number, if any, of the recipient of the supply of goods or services and the alphabetical code of the Member State in which that recipient is registered.

Specifically for services, to satisfy yourself that you are making business to business supplies (B2B) you should obtain commercial evidence showing that your customer belongs outside the UK and does not receive your supply for a wholly private purpose. VAT registration numbers are the best evidence that the supply is not received for a wholly private purpose and should be requested. If your customer is unable to provide a VAT number, you can accept alternative evidence. This includes certificates from fiscal authorities, business letterheads or other commercial documents indicating the nature of the customer’s activities. Such evidence should be kept as part of your records. Where VAT numbers are available, they should be shown on your invoice. Please refer to VAT Notice 741A – Place of supply of services.  https://www.gov.uk/government/publications/vat-notice-741a-place-of-supply-of-services

HM Revenue & Customs

Customs International Trade & Excise

www.hmrc.gov.uk/contactus

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