vat question.

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thefisherman

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hi i recently purchased an item from polish distributor of a swedish company for my own personal use( a heat pump).the polish company did not charge me vat as it was export for him and i gave my vat no to him.my question is-do i owe vat,and if so-to whom?? i am quite willing to pay the vat as it was half the price i would pay for it in ireland but if idont have to pay-well better again
 
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From my experience ,no you do not owe vat.Just get an invoice showing amount paid etc and record it in vat book under, purchases, zero vat rated.
 
thefisherman said:
hi i recently purchased an item from polish distributor of a swedish company for my own personal use
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Following assumptions are made in my reading of your question, correct me if these are not the case :
1) that you are self-employed given that you have a VAT number.
2) You state the item was for personal use. Assume this means that it was not a purchase in the course of your business, i.e. either for re-sale in your business or as an expense in your business.

Zero rating of goods within the EU is intended to simplify the process of VAT registered traders purchasing business re-sale or expense goods from other VAT registered traders in other EU member states.

VAT is claimable / or zero-rateable by a trader only on those goods intended for the traders business use either as re-sale or expense. If that pump had been purchased in Ireland and VAT paid on it, and if it was for personal use, then you would not have been entitled to claim the VAT back on it. Further, if the payment had been from the business, the transaction would be treated as drawings or self-supplies. The Swedish company has no interest in what you do with the goods, merely that they have a VAT number and are, therefore, with that VAT number to hand, entitled to sell to you without charging VAT. The goods remain VATable goods, just that the VAT was not liable to have been charged at that point.

I am open to correction on this but had they charged the Swedish VAT on the goods as a personal and non-business transaction, no further Irish VAT would have been due. I am inclined to think therefore that it is a Swedish VAT issue. However the transaction should be treated as personal if it is such and all payments in respect of it go to drawings and not claimed in the business. There is also the posible Irish issue of incorrect use of your VAT number for purposes of not paying VAT on the purchase. I'm not sure what, if anything Revenue would make of this. Only likely to come up if you were audited by Revenue.
 
Emptypockets said:
From my experience ,no you do not owe vat.Just get an invoice showing amount paid etc and record it in vat book under, purchases, zero vat rated.
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1) If it is a personal transaction then it goes no-where near the business purchases book

2) Even if it is a business transaction it does not go under zero VAT rated purchases. It is not a zero good. A pump, in Ireland would be a 21% good. As such the EU acquisition of one would, if its a business expense, go under 21% EU Acquisition Expenses. i.e. a 21% good on which no VAT was charged by virtue of it coming from another member state. If it were for re-sale here it would go under 21% EU Acquisition Re-sale. This is important as there was no VAT paid on the purchase but it is a VATable good and there is VAT due on the sale here so with no VAT input credit the VAT due on the sale reflects that on the whole sale amount.
 
Here's my take on it (I think this is right, but cannot back it up with documentation for you, it's just based on my experience).

1. The item is for personal use, so nothing to do with your business or its VAT number.

2. Since you are the final user of the item, you have to pay VAT. (Someone has to pay VAT, and it's the end user.) The supplier should have charged VAT at the rate of the supplier's country (not Irish VAT, since the transaction originated in another country).
 
so i should pay irish revenue?? i have the feeling i should pay vat but to whom? i rang limerick office and a lady told me i did not owe vat,rang cork office and they tell me i do-it seems it depends on which office i ring. there is some one in revenue to ring me back later today after checking it out so it is not as simple as it seems . graham- i am self-employed blocklayer with vat no.so pump has nothing to do with my line of work-it is for heating my new house
 
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thefisherman said:
so i should pay irish revenue?? i have the feeling i should pay vat but to whom? i rang limerick office and a lady told me i did not owe vat,rang cork office and they tell me i do-it seems it depends on which office i ring. there is some one in revenue to ring me back later today after checking it out so it is not as simple as it seems . graham- i am self-employed blocklayer with vat no.so pump has nothing to do with my line of work-it is for heating my new house
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Your experience with Revenue is not unusual. Unfortunately you really need to speak with a VAT outdoor officer, or audit team member. I agree with Slash, you should not have used VAT number on the purchase in first place. Problem is you cannot pay Swedish VAT rate to Iris Revenue. Overall it may come down to how material the amount of VAT would be in the overall scheme of things.
 
The Revenue Cimmissioners have nothing to do with this. That is why they are unable to answer your question. Stop ringing them.

The supplier should have charged VAT on their invoice. They return the VAT to their tax authority. All you had to do was pay the invoice, including VAT, to the supplier.
 
I don't think this is so complicated.

You as a business, using your businesss VAT number bought the pump from Sweden and the transaction was correctly zero rated.

If you will use this pump personally your business must invoice YOU in your personal capacity and charge vat @ 21%. Your business then hands over the vat on the next vat return.

If the vat rate in Sweden (or Poland) is less than 21% you might have been better not to purchase the pump through your business but to buy it directly and personally inclusive of the foreign vat.If you did this there would be no further liability to irish vat.

I hope this helps
 
APHRODITE said:
I don't think this is so complicated.

You as a business, using your businesss VAT number bought the pump from Sweden and the transaction was correctly zero rated.

If you will use this pump personally your business must invoice YOU in your personal capacity and charge vat @ 21%. Your business then hands over the vat on the next vat return.

If the vat rate in Sweden (or Poland) is less than 21% you might have been better not to purchase the pump through your business but to buy it directly and personally inclusive of the foreign vat.If you did this there would be no further liability to irish vat.

I hope this helps
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APHRODITE said:
I don't think this is so complicated.

You as a business, using your businesss VAT number bought the pump from Sweden and the transaction was correctly zero rated.

If you will use this pump personally your business must invoice YOU in your personal capacity and charge vat @ 21%. Your business then hands over the vat on the next vat return.

If the vat rate in Sweden (or Poland) is less than 21% you might have been better not to purchase the pump through your business but to buy it directly and personally inclusive of the foreign vat.If you did this there would be no further liability to irish vat.

I hope this helps
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I like your way of thinking. Lovely solution. However its still evasion if the Swedish VAT rate is higher than 21%.
 
Joe

Certainly not evasion.

Any business is entitled to buy merchandise in any other EU state and have the transaction zero rated.

Like wise the business in Ireland is entitled to sell on that product to a third party in Ireland including the owner of the business but must charge vat @ 21%.

Clear as mud
 
APHRODITE said:
You as a business, using your businesss VAT number bought the pump from Sweden and the transaction was correctly zero rated.

If you will use this pump personally your business must invoice YOU in your personal capacity and charge vat @ 21%. Your business then hands over the vat on the next vat return.
Click to expand...

Great when someone thinks "outside the box", should have seen that myself.
 
Certainly not evasion.</p>Is evasion if the intent is to avoid paying Swedish VAT on a personal purchase. However your scenario does work - good thinking.
 
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