you are not paying vat twice you are paying vat once and collecting vat on sale of the goods when they are sold. Ie when you become refistered for vat your net sales figure remains the same.
When importing goods, always register for VAT, give your VAT number and you will recieve the goods without the charge of VAT.
You then charge the applicable Irish VAT on the sale. The customer pays this VAT - you only collect it on behalf of Revenue and pay it over.
It doesn't sound like you understand, but I'll explain.... Hi Paddy, thanks for the input but I do understand how VAT works ...
Correct and as you were not registered for VAT you cannot reclaim this VAT, however your purchase cost is the VAT inclusive price you paid.Bought the goods from a european country, paid VAT to said country. That's Once. ...
Wrong, major fail, your bad.... Register for VAT.
Sell the same goods mentioned above. I now owe the government 21% VAT. That's twice. ...
Lads, you're getting caught up in semantics here, and not looking at the bottom line.
I buy something from Holland while not VAT registed. For simplicity, wholesale price €50, RRP €100.
I pay Dutch company €50 + 19% VAT = 59.5. VAT not reclaimable.
I sell this in Ireland, while still not VAT registered, gross profit is 100 - 59.5 = €40.5
BUT if I register for VAT before the sale - yet after the goods have been purchased and VAT paid abroad - the RRP stays the same (I cannot just up the price - the RRP is fixed) so the GP becomes:
100 - 59.5 (incl. VAT collected by Holland) - 17.36 (VAT collected by Ireland) = €23.14
Two countries just took VAT chunks out of the RRP during this 'limbo' period.
Well in my case I didn't know there was an RRP as part of the problem.The previous posts were assuming you would have to change your RRP! ...
So IMHO VAT registration may not be the problem, maybe it's short-term opportunism.
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