UK VAT Rates

[Al Brookbanks]

Does anybody know how it works?

I know it isn't a simple subject but VAT is driving me crazy for UK businesses.

As far as I gather, if you are VAT registered you have to add VAT to any of the 25 EU member states and not to any outside of this.

Therefore do you tax VAT @ 17.5% to all of these countries or do you tax the countries particular rate. e.g. Ireland @ 21%?

Or am I a complete moron who has got it completely wrong and should take a trip in a white coat to a new home?! ;)

[Guest aikdo]

Brooky from what i can gather you ad 17.5% to all the 25 EU countries and nothing to anything outside of them in simple terms, but i think i read there is a diffrent rule for digital products somewhere...

[Guest]

From what I understand

If you are a UK shop

selling with in the UK you charge 17.5%

selling outside of Europe you charge 17.5%

Now the tricky part

Within Europe

If they are VAT registered and supply a VAT number you charge 0%

If they are not VAT registered you have to charge them 17.5%

Make sense ;)

[Al Brookbanks]

Just spoke to Carl who says you charge VAT everywhere unless they have a TAX number when you can make it 0%.

Gone phone the business link.

EvilHomer posted at the same time as me. :-/

[Guest aikdo]

No if they have a vat number you still charge them 17.5% VAT but you must supply them with a VAT receipt after purchase and then they can Claim that 17.5% back off the VAT man at the end of the year,....

[Guest aikdo]

Basicaly you charge ALL EU states VAT at your local rate-

The new EU VAT Directive only applies to sellers who reside, have a permanent address, or are established within the EU. If you are an EU resident and use any eBay EU site to sell items, you may be charged VAT on eBay fees. eBay does not charge VAT in respect of use of eBay non-EU sites.

But there are some things you dont charge for -

Services are taxed in the supplier’s country unless they are covered by one of the special rules described below:

* services relating to land and property - taxed in the country where the land is;

* services involving physical performance - taxed in the country where the physical performance takes place;

* valuation of, or work on goods for an EC VAT registered customer where the goods are subsequently removed to another country - taxed in the customer’s country;

* freight and passenger transport - taxed in the country or countries where the transport takes place;

* intra-EC freight transport and related ancillary services and the services of intermediaries arranging those supplies - see Notice 741

* certain intermediary services - see Notice 741

* certain services, including those of a professional and intellectual character, listed in paragraphs 1 to 8 of Schedule 5 of the VAT Act - normally taxed in the supplier’s or customer’s country depending on the circumstances. But in the case of telecommunications services and the hiring of goods, additional rules may apply which tax such services in the country where they are used and enjoyed or

* hiring of means of transport- taxed in the supplier’s country or where the transport is used and enjoyed, depending on the circumstances.

The main one being Digital Products are not to be charged VAT since Jan 1st 2003

VAT Treatment

In line with international agreements supplies of digitised products are "not goods" in respect of customs duties and VAT.

For VAT and duty purposes, all supplies of digitised products are treated as services. This means that customs duties are not chargeable in the EC.

[Guest]

Unsure on digital products but i know if they eu company with vat number you dont charge them vat or claim it back.

[Guest digilution]

From what I understand

If you are a UK shop

selling with in the UK you charge 17.5%

selling outside of Europe you charge 17.5%

Now the tricky part

Within Europe

If they are VAT registered and supply a VAT number you charge 0%

If they are not VAT registered you have to charge them 17.5%

Make sense

Agree with all of the above. If they are VAT registered, the choice is yours if you charge the 17.5%. One company supplies me my products incl VAT and another does not charge me the VAT. :cry:

[Guest aikdo]

basicaly its not a requirement to remove tax if they are tax registered as they can just as easily claim the VAT back at the end of the year anyway...

[Robsta]

Brooky from what i can gather you ad 17.5% to all the 25 EU countries and nothing to anything outside of them in simple terms, but i think i read there is a diffrent rule for digital products somewhere...

I've had a headache with VAT as well. Here's the thread.

Digital products are interpretted as services at point of use. Therefore the customers tax rate applies, however you must find out whether the use is for consumers (tax does not apply) or business (tax does apply, at their countries' rate). UK VAT applied to Europe for both consumer and business I believe.

With tangible goods, the point of sale is the country in which the shop is based. In which case in Europe UK VAT applied. With regards to outside of Europe, I believe VAT is not applicable unless it's over a certain amount, in which case the business would have to register for that countries tax system and charge their tax rate.

I researched digital products more than tangible, but I am no expert on either. Brooky, try calling HM Revenue and Customs.