Trading in EU and VAT

[sausagekayake]

Hi All,

My company is registered for VAT.
I will be selling online to customers all over the EU.
My supplier is also VAT registered.

When I purchase goods off my supplier he will not charge me VAT as I understand when trading in the EU if both parties are registered for VAT then no VAT is charged to me.

I do not take physical delivery of the product, my supplier ships directly to the customer for me all over the EU.

So when I sell the product online I understand that I need to add 23% VAT to my sale price. All of this 23% VAT goes to the revenue as I have no VAT of my purchase to off set.

My questions is, does it matter that I am selling in other countries, will the rate that I pay always be 23% to the "Irish revenue"?

Thanks.

 

[newirishman]

You need to charge the rate of VAT of the country where your customer sits, and pay the VAT to the tax office there.
VATMOSS has been setup to deal with this in a simplified manner, so you don't have to register with 28 tax offices.

There's some exception, minimum turnover, etc., so have a look at this: http://www.revenue.ie/en/tax/vat/guide/supply-of-goods.html

Your accountant should also be able to advise.

 

[sausagekayake]

You need to charge the rate of VAT of the country where your customer sits, and pay the VAT to the tax office there.
VATMOSS has been setup to deal with this in a simplified manner, so you don't have to register with 28 tax offices.

There's some exception, minimum turnover, etc..

Thanks very much for the reply.

So I have been researching all day. This is what I understand now.
As I am selling online to other EU countries and as long as I stay under the threshold of the country I am selling and it is a B2C sale, then I qualify for Distance Selling.
From what I can gather this means I pay 23% VAT to the 'Irish' revenue on each sale (not sure if this line is correct, see question below). When and if I breach the threshold for a country in the EU which I am selling then I need to register for VAT in that country, or maybe use VATMOSS as you have stated above, need to research this tool.

So my next question is, my company is registered in Ireland, the product will be shipped on my behalf from the supplier outside of Ireland (Netherlands)to the customer in an EU country, B2C sale. I obviously have to collect VAT on the sale, so who should I pay VAT to, will it be where my company is registered or will it be from where the good were shipped, in this case the Netherlands?

 

[newirishman]

Thanks very much for the reply.

So I have been researching all day. This is what I understand now.
As I am selling online to other EU countries and as long as I stay under the threshold of the country I am selling and it is a B2C sale, then I qualify for Distance Selling.
From what I can gather this means I pay 23% VAT to the 'Irish' revenue on each sale (not sure if this line is correct, see question below). When and if I breach the threshold for a country in the EU which I am selling then I need to register for VAT in that country, or maybe use VATMOSS as you have stated above, need to research this tool.

So my next question is, my company is registered in Ireland, the product will be shipped on my behalf from the supplier outside of Ireland (Netherlands)to the customer in an EU country, B2C sale. I obviously have to collect VAT on the sale, so who should I pay VAT to, will it be where my company is registered or will it be from where the good were shipped, in this case the Netherlands?

Doesn't matter where the good is shipped from or your company is registered (assuming both in EU) - it only matters where the buyer sits. This is the tax rate that you have to charge.

 

[sausagekayake]

Doesn't matter where the good is shipped from or your company is registered (assuming both in EU) - it only matters where the buyer sits. This is the tax rate that you have to charge.

I just pulled this from the revenue website, from my understanding does this not mean that I would have to pay Dutch rates to the Dutch government as this is where the supplier is based?
I might be picking up on this totally wrong.

"Distance selling in the EU occurs when goods are dispatched or transported for or on behalf of a supplier in one EU Member State to a person in another Member State who is not registered for VAT. It includes mail order sales, phone or tele-sales or physical goods ordered over the internet.

Under the distance selling arrangements, sales to customers in other Member States who are not registered for VAT are liable to VAT in the Member State of the supplier, provided that the threshold appropriate to the Member State of the customer is not breached"

 

[Joe_90]

You charge Irish VAT until you reach the distance selling threshold of the county to which you are selling.

If you breach the threshold then you need to register for VAT in that country and change the local rate and remit it to their Collector.

The only issue will be sales in Holland, your supplier will not zero rate the supply of it does not leave Holland.

 

[sausagekayake]

You charge Irish VAT until you reach the distance selling threshold of the county to which you are selling

Ok, so I charge Irish VAT even though the products are not leaving from Ireland?
And also and FYI, I will be paying the supplier for the product before he ships to my customer, i.e. when I receive payment online I will make the order with my supplier and pay him at the same time.

The only issue will be sales in Holland, your supplier will not zero rate the supply of it does not leave Holland.

Ok so in this case he will probably charge VAT and I can claim it back on the sales VAT?