Phone Credit

O

ohtwo

Registered User
Messages
48
Hi all,

If I were to begin selling phone credit, how does that work out for VAT purposes.

I wont actually be purchasing anything, and the commission will be withheld from the amount I owe the service provider.

Is there a VAT liability on this?
 
See [broken link removed] for rate. (21.5%)

Note that you must exceed the registration threshold before you are obliged to register :-



The principal thresholds applicable are as follows:
  • €35,000 in the case of persons supplying services ,
  • €70,000 for persons supplying goods
A taxable person established in the State is not required to register for VAT if his or her turnover does not reach the appropriate threshold above. However, they may opt to register for VAT.

The thresholds are for the entire business so if , for example, you are a newsagent and are adding phone credit as an addition then you will probably already be registered for VAT. Check with your accountant/advisor to be sure.
 
hi,

yes I'm registered for VAT and have been filling in VAT returns etc, but more specifically I was wondering the following:

If I were to introduce a phone credit terminal then I would not be buying any stock/materials for this and would not be paying VAT on any puirchases.
So say for example I sold €10 worth of credit, I would take €10 from the customer and €9.50 would be debited by my account by the service provider. So do I need to pay VAT on the 50c that I made on this transaction, and if so, how would that be calculated as I didnt pay VAT on an initial purchase. confused!!
 
ohtwo said:
hi,

So do I need to pay VAT on the 50c that I made on this transaction, and if so, how would that be calculated as I didnt pay VAT on an initial purchase. confused!!
Click to expand...

What makes you think you are not paying VAT on the purchase ? I know that Alphyra ( as one company in that market ) DO charge 21.5% VAT to their agent shops. Then you get credit for that VAT against the sale resulting in a net VAT charge on the commission.
 
ohtwo said:
i didnt think I was because I wouldnt actually be purchasing anything. obviously I'm wrong
Click to expand...

You are purchasing phone credit on invoice to you from your supplier for €9.50. You are selling that phone credit to the customer for €10.00. You get a profit/commission of €0.50. If there is VAT on the purchase at 21.5% there will be VAT on the sale and ultimately net VAT payable on the difference. Check withe the supplier and your accountant.
 
You must log in or register to reply here.
Back
Top