Charging VAT to EU customers

A

astrosaver

Registered User
Messages
13
Post edited for clarity

For an online business selling products, do you charge Irish VAT at 21%
to customers outside Ireland?

I've been told if the customer has an EU VAT number, we do not need to charge
VAT to EU customers

Thanks
 
Yes, that is what I thought.
All our sales are online, and my current understanding of charging
VAT is as follows:

1. If customer is in IE, charge VAT at 21%
2. If customer is in EU, charge VAT at 21%.
3. If customer is non IE, non EU then don't charge VAT.

When I buy things from some companies in the EU, they
don't charge me VAT, when I supply them our IE VAT registration
number. Does that mean if a EU customer places an order with us, and supplies their german or french VAT number etc, then we do not need to charge VAT on the sale?

Bizzarely, for Irish suppliers, even when we provide our VAT number, we
are still charged VAT, which we then then to reclaim every 2 months. It seems to work both ways. Which is the correct way - to charge VAT or not, when given a business VAT number?
 
astrosaver said:
Does that mean if a EU customer places an order with us, and supplies their german or french VAT number etc, then we do not need to charge VAT on the sale?
Click to expand...

Yes. But check VAT no. is valid/authentic first. And always quote the number on any invoices/delivery notes.

... for Irish suppliers...
Which is the correct way - to charge VAT or not, when given a business VAT number?
Click to expand...

To charge. Except when customers are VAT free and have supplied a copy of their current, valid VAT free authorisation form.
 
Thanks guys - I always wondered how to check EU VAT numbers.
I wonder can I automate it as part of the order - sign up process.
I will check.

So why is it different in Ireland.
ie - why always charge VAT even when they have a VAT number?
It seems then both companies have to do a lot of VAT accounting
, reclaims etc, when the method of not charging VAT if it's a VAT
registered company would be simpler?!
 
Just read this interesting post. Was also wondering what happens if the OP was to sell services nor products to his EU Customers? I have been told that if a service is provided to an Irish Company and the invoicing details are that of an other EU Country, VAT must still be applied even if a EU VAT number is provided becuase the service is on an Irish Company. Is this true and is it the same if the invoicing details are that of a non-EU company? The Revenue never give you a clear answer on anything....
 
The system is very sensible

Most companies are selling more than they are purchasing. They deduct the vat paid from the VAT payable so they have a net vat liability.

If an Irish company had to pay VAT on purchases from the UK, they would reclaim it from the Irish government who never received it or else they would reclaim it from the UK government.

So it makes sense to charge no VAT if they are going to be able to reclaim it anyway.

I suppose that this could be extended to all customers. If I am going to reclaim VAT, why should I pay it at all in the first place? Wouldn't it be simpler just to charge VAT to non registered customers?

Brendan
 
2. If customer is in EU, charge VAT at 21%.
Click to expand...

I think there is some caveat if your export turnover to the country is over a certain annual threshold. I know Amazon UK charge 21% VAT on Irish purchases (for VATted products.). Also treatment of digitally delivered products (software and MP3 downloads etc.) may differ from physically shipped products.
 
I'm about to quote a UK firm for services leading to a sale of product (software). I generally quote ex VAt but detail what the relevant VAT rate is further down a proposal.
Should I quote 21% or 17.5% (UK Rate) for VAT. Reading the above I presume the former. In Ireland my client types (healthcare) are unable to reclaim VAT so I never have to worry about it, just lob it on the bill and submit proceeds to revenue. Don't think the same issue is relevant in UK
 
If you are Irish based, they UK based (and registered for VAT) simply issue zero rated invoice, but quote their VAT no. on all paperwork.
 
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