VAT on purchasing UK goods for resale

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bizz1

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Hi,
Quick question - I am going to import product from the UK to retail in Ireland. How does the VAT work with regard to the 17.5 VAT charged from the UK to the 21% VAT i have to charge to my Irish customers (i.e the 3.5% difference)?

Is my UK distributor supposed to charge me the VAT?

Many Thanks
bizz1
 
The goods you buy from the UK supplier should be sold as "EXPORTS" and no VAT should be attached as long as you are VAT registered here. You will then add 21% when selling the good here in Ireland and then give this VAT to Revenue.
 
bizz1 said:
Hi,
Quick question - I am going to import product from the UK to retail in Ireland. How does the VAT work with regard to the 17.5 VAT charged from the UK to the 21% VAT i have to charge to my Irish customers (i.e the 3.5% difference)?

Is my UK distributor supposed to charge me the VAT?

Many Thanks
bizz1
Click to expand...

Assuming you are registered for VAT in Ireland, you must give that VAT number to the UK supplier he will then zero rate the invoice. You must then self account for the VAT i.e charge yourself VAT at the rate that would apply as if you purchased the goods in Ireland (T1 on the VAT3).

Then assuming you are putting the goods to a taxable use i.e making supplies that are subject to VAT you can claim an input credit for the equal amount (T2 on the VAT3) leaving a VAT neutral position.

This is neccessary to ensure no distortion of competition within the EU, we do not call them imports or exports that only applies when you trade outside the EU instead they are called intra-Community acquisition since we entered the single market in January 1993

If you are not Irish VAT registered or you do not give your VAT number to the UK supplier he/she must charge you UK VAT. Again you may be able to recover same if the goods are put to a VATable use
 
[/quote] Again you may be able to recover same if the goods are put to a VATable use[/quote]

I didn't think this was the case. I taught you just had to take the hit for the UK vat if you are not registered here.

Who do you claim it back off, the inland revenue ???
 
VAT recovery depends solely on whether or not the supplies of goods or services are then put to a taxable use

Here is a quote from section 12 VAT Act 1972:

"In computing the amount of tax payable by him in respect of a taxable period, a taxable person may, insofar as the goods and services are used by him for the purposes of his taxable supplies or of any of the qualifying activities, deduct [, subject to making any adjustments required in accordance with section 12D]1-"


If you are not VAT registered the UK supplier may have an obligation to charge VAT
If you can recover the VAT then its recovered from Irish revenue not the UK revenue.
 
Sorry, but i have to disagree with Bazermac on one small point.

If UK VAT is chargeable and an entitlement to reclaim the VAT arises, it must be reclaimed from the UK Inland Revenue and not the Irish Revenue.

This also operates in the opposite situation, where unregistered foreign businesses can reclaim VAT in Ireland under the EU 8th & 13th Directive, the UK authorities have to operate the same directive.
 
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