I have a new client in Norway. They have ordered a trial set of our products with a view to ordering many in the future.
My question is how do I invoice them? (I have not invoiced abroad before) What is the tax implication. Obviously I would normally charge vat at 20% but I see they pay 25% – what happens in this situation? These are paper goods.
Hope someone can help
As Norway are not in the EU there is no VAT to be charged – this sale would be considered an export.
Depending on what exactly it is that your sending, their value and how you are planning to send them there may be some slightly additional paperwork requirements.
If you want to chat a bit more you can e-mail me at firstname.lastname@example.org.
You will not be charging VAT and Norwegian VAT will be added at customs when it reaches Norway,
For more info about the Norwegian VAT system, see http://www.pwc.no/no/ghost-templates-no-no/vat-aspects-and-doing-business-in-norway.html
A zero-rated VAT supply is one which is subject to VAT but where the VAT is at 0%. The supply of exported goods is zero-rated provided certain conditions are met.
Assuming you own the goods and export them (or arrange for them to be exported) outside the EC, for example, Norway, you can zero rate your sale as a direct export. Paragraph 3.3 of VAT Notice 703 – Export of goods from the UK explains the conditions for zero-rating direct exports. https://www.gov.uk/government/publications/vat-notice-703-export-of-goods-from-the-uk
Also, you do not need to account for VAT when there is no taxable supply, such as when exporting goods outside the EC temporarily or on a sale or return basis (where the goods remain your property until they are sold). You must still hold valid proof of export (see sections 6 and 7) to demonstrate to HMRC how you disposed of the goods. You must also declare to us any goods returned to the UK.
Although zero-rated supplies are taxable supplies, and so fall within the scope of VAT, there is no obligation to issue VAT invoices for exports. Zero-rated supplies may be included in a full VAT invoice provided the invoice clearly identifies those items which bear no VAT charge. Paragraph 16.5 of VAT Notice 700 – The VAT Guide refers https://www.gov.uk/government/publications/vat-notice-700-the-vat-guide
HM Revenue & Customs
Customs International Trade & Excise