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VAT implications for providing ICT services to US Company

  • 24-09-2008 2:03pm
    #1
    JohnMcNamara
    Closed Accounts Posts: 2 ✭


    Hi,
    My ICT consultancy company has just signed a new US client which I plan to sub contract this work out to an Irish contract programmer.

    What are the VAT implications here?

    1) Is there a VAT exemption between Irish and US companies so I wont have to charge my new client VAT.
    2) Will the sub-contractor be VAT exempt also in this case?

    Thanks in advance for all advice.

    Kind Regards,
    John


Comments

  • #2
    Keano
    Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators, Sports Moderators Posts: 12,808 Mod ✭✭✭✭Keano


    There is not VAT implications between Ireland and the US. It is considered an export ASFAIK that includes services.

    You will talk your contractor about their company setup.


  • #3
    information
    Closed Accounts Posts: 362 ✭✭information


    Keano A Legend wrote: »
    There is not VAT implications between Ireland and the US. It is considered an export ASFAIK that includes services.

    You will talk your contractor about their company setup.
    its not that clear cut.

    If you are doing a large part of your turnover with the American company, you could have issues with having to register for tax in the us and deregistering for vat here.

    The sub contractor is a different entity and will charge vat in the normal way.


  • #4
    Keano
    Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators, Sports Moderators Posts: 12,808 Mod ✭✭✭✭Keano


    Agreed about clear cut.

    OP should talk to the Revenue and be very clear before proceeding.


  • #5
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Two questions:

    What is the nature of the services being provided?

    What are the invoicing arrangements? i.e Is the sub contractor invoicing you and you are invoicing the US company or is the subcontractor invoicing the US entity directly?


  • #6
    JohnMcNamara
    Closed Accounts Posts: 2 ✭JohnMcNamara


    Q: What is the nature of the services being provided?

    IT Programming Services

    Q: What are the invoicing arrangements? i.e Is the sub contractor invoicing you and you are invoicing the US company or is the subcontractor invoicing the US entity directly?

    The Sub-Contractor will invoice me and then I will invoice the US Company directly

    Thanks for the help and advice guys.


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  • #7
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Electonically supplied services are taxed (for VAT purposes) where they are received. (4th Schedule)

    Assuming this is the creation of a US website:

    The invoice between you and the US company. VATable in the US. No Irish VAT applies.

    The invoice between you and the subcontractor.
    Technically the services are received in the US by the US entity. However you are an Irish receipient of the services. The subcontractor will be oblidge to charge you Irish VAT on the invoice


    However if these services are related to an Irish website and you are billing a US entity the Revenue may hold that the services are received in Ireland.


  • #8
    [Deleted User]
    Posts: 5,121 ✭✭✭ [Deleted User]


    Would the US company withhold any thing from payments to the Irish company because of where the service was provided?


  • #9
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    No Idea.

    Don't know anything bout US withholding tax.


  • #10
    ECOLED.IE
    Closed Accounts Posts: 2 ✭ECOLED.IE


    There is no VAT for goods or services export to outside of Ireland , no matter the destination is within the EU or outside of EU
    There is no VAT.
    Please click on link below on page 29 Section 11: Miscellaneous
    http://www.revenue.ie/en/customs/leaflets/export-procedures-guide.pdf
    or VAT Rates: Exports - Exports
    http://www.revenue.ie/en/tax/vat/rates/decision-detail-00758.jsp


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