Taxation VAT

Question

As a financial service, being credit control, I charge no V.A.T. to EC countries. I am currently looking towards trade with China and South Korea for examples. Does the policy differ for such countries?

Answer

My understanding is that if you are supplying "services" then the VAT question depends on the ‘place of supply’ as outlined by HMRC in Public Notice 741a section 2.2……This link to HMRC may help to explain http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document#P43_6089

2.2 What does ‘place of supply’ mean for UK suppliers?

If the place of supply of your services is the UK, you must charge any UK VAT due and account for it to HMRC regardless of where your customer belongs. If the place of supply of your services is another Member State, you or your customer may be liable to account for any VAT due to the tax authorities of that country. See paragraph 2.16.

Where the place of supply of your services is outside the UK, you should ensure that your records contain sufficient factual evidence that this is the case. See paragraph 2.7.

hope this helps

Answer

Hi Dawn,

Pete West is spot on.. for the VAT. We have done some work in the Middle East. If you need a contact who can help with the paper work for the export let me know. You will need certificate of origin, this needs to approve by Dubai embassy and this is additional cost.

Jas

Answer

I am not exporting, except money < promptly 🙂 to creditors, as a middle-man so to speak, so to a degree, the V.A.T. is already paid between traders.

Credit Control is classed as a book-keeping service, if I recall my conversation with HMRC correctly and I charge no V.A.T. to E.C. countries. It is the overseas client’s responsibility to sort this out with their own government I was categorically told by HMRC.

I still need firm answers in respect of other, non E.C. countries. I feel another conversation with the V.A.T. man coming on.

Many thanks for all input and I continue to welcome any further comments and experience.

Anne
EUCCUK
Credit Control and Customer Relations Service

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