Hello!
I know that gifts or free promotional goods offered to customers are liable for VAT if the value of the goods offered is 21 EUR or more (i.e. if the cost to the donor is 21 EUR or more).
So, for example, I offer a customer a free digital camera simply for being a loyal customer, and if that camera cost me 19 EUR ex VAT, then I don't need to account for VAT on that item. However, if the camera cost me 21 EUR ex VAT, then I have to account for VAT on 21 EUR at the standard rate of 21%.
That's all fine. My question though is about something slightly different. Say I purchase a laptop from a supplier which costs me 300 EUR. I then offer the same laptop to a customer for a discounted price of 150 EUR plus VAT. I'm therefore making a loss (so to say) on that laptop, but it's not really a gift as above. How would this work in terms of VAT? Do I just account for the VAT on the 150 EUR or is there some kind of special rule with regards to this?
Thanks!
J.
I know that gifts or free promotional goods offered to customers are liable for VAT if the value of the goods offered is 21 EUR or more (i.e. if the cost to the donor is 21 EUR or more).
So, for example, I offer a customer a free digital camera simply for being a loyal customer, and if that camera cost me 19 EUR ex VAT, then I don't need to account for VAT on that item. However, if the camera cost me 21 EUR ex VAT, then I have to account for VAT on 21 EUR at the standard rate of 21%.
That's all fine. My question though is about something slightly different. Say I purchase a laptop from a supplier which costs me 300 EUR. I then offer the same laptop to a customer for a discounted price of 150 EUR plus VAT. I'm therefore making a loss (so to say) on that laptop, but it's not really a gift as above. How would this work in terms of VAT? Do I just account for the VAT on the 150 EUR or is there some kind of special rule with regards to this?
Thanks!
J.