VAT liability abroad

E

Exchanger

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I have a small business and co-ordinate with other similar businesses in the EU to purchase IT services. When completing our invoices, one of the businesses based in Belgium, collects the money and makes a tax return to the Belgium tax authorities on behalf of the group. I am charged VAT on this invoice for the IT services even though I am not liable for VAT in this country as my turnover is well under the threshold. Some others in the group are in the same situation e.g. US and Canada. In other words any of the small businesses within and outside the EU that does not have a current VAT number is considered liable for VAT to be paid to the Belgian tax authorities.

Is this correct? Can I register for VAT here and claim back the VAT that I am paying on my invoice issued in Belgium? I would have thought given that those of us in the EU that are exempt from VAT in their own country, should not then be considered liable in another EU country if the threshold there is the same or less.

I would be grateful for any advice on this.

Many thanks.
 
You are not exempt from VAT.

As a small business you do not need to register for VAT.
That means that you don't need to charge it.
And you can't reclaim it.

But suppliers must charge you VAT.

Brendan
 
Thanks Brendan and Ryaner for your replies.
I've looked at the Revenue website using the link ryaner provided and see this

"Exempt persons and certain non-taxable persons receiving taxable services from abroad​

[broken link removed] and certain non-taxable persons must register and account for VAT if they receive taxable services from abroad. This obligation arises irrespective of the value of those service

Paying VAT on services from abroad
You must pay VAT on the invoiced amounts at the appropriate Irish VAT rate to Revenue in your periodic VAT return. You may qualify to reclaim the VAT at the same time.

By passing your VAT number to the supplier, you will avoid paying VAT in the other Member State."

So it would appear that I should have registered forVAT here to have some chance of reclaiming it. I'm getting worried now as I've been paying this tax to the Belgian authorities. Do. member states reimburse each other?
Also I see this form which may apply. https://www.revenue.ie/en/vat/documents/form-vat60e.pdf Difficult to understand whether this would apply to me.
 
I'm pretty sure all the Revenue authorities have their own agreements for balancing payments. Over the years most foreign suppliers still charged Vat and we just accounted for it normally as well as in the end of year intra trading figures.
 
Exchanger said:
So it would appear that I should have registered forVAT here to have some chance of reclaiming it.
Click to expand...

Have you spoken to your accountant?

If you register for VAT, you must charge your customers VAT.

This would not matter if all your customers were themselves VAT registered businesses who could reclaim the VAT.

But it would push up your prices by 13.5% or 23% for consumers and organisations which are not VAT registered.

You would also have some additional bookkeeping to do.

Brendan
 
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