Charging VAT to clients outside the EU

pontovic

Hello,

I have a client I have been doing some web design work for. On completion of the work they have relocated to the United States and set up a company there. They want all invoices going to that company. They are paying me from an Irish bank account in Euro.

My questions are:

1) Do I charge them VAT at the standard 21.5% or a zero VAT rate?

2) I read the tax guide 2008 pdf on the revenue.ie website but they mention goods and not services. Can I assume that the provision of goods and services are the same?

Before I invoice my client I want to be sure that I am doing the right thing.

Thanks

Galego

pontovic wrote: »

Hello,

I have a client I have been doing some web design work for. On completion of the work they have relocated to the United States and set up a company there. They want all invoices going to that company. They are paying me from an Irish bank account in Euro.

My questions are:

1) Do I charge them VAT at the standard 21.5% or a zero VAT rate?

2) I read the tax guide 2008 pdf on the revenue.ie website but they mention goods and not services. Can I assume that the provision of goods and services are the same?

Before I invoice my client I want to be sure that I am doing the right thing.

Thanks

I work in AR and at my company (irish company) we do not charge irish VAT to our customer in EMEA neither for goods or services.

Hope my answer helps you.

MartMax

Galego wrote: »

I work in AR and at my company (irish company) we do not charge irish VAT to our customer in EMEA neither for goods or services.

Hope my answer helps you.

i believe that would require the vendor to get the VAT number of the customer i.e. the customer must be VAT registered in any of the EU/EEA countries. Without VAT number, they have to be charged with VAT if i'm not mistaken.

dbran

Hi

If you are invoicing anyone outside the EEC for goods or services it is zero rated. It dosent matter that they pay you in euro from an Irish account.

Regards

DB

boardswalker

Whether or not Vat is liable on services depends on "the place of supply" of the service. If the service is supplied in Ireland, then VAT is chargeable in Ireland. If the service is supplied outside of ireland then vat is not chargeable.
The question then is where is your service provided.
There does not seem to be much guidance on the irish revenue website. However the UK revenue have a detailed document online, which complies with EU vat law that also applies to Ireland, and section 13 of that document states - "If, as a UK supplier, you supply any of the services in section 13 to any person who belongs outside the EC, that is supplies to business, non-business or private customers belonging outside the EC, your services are
supplied in your customer’s country and are outside the scope of UK and EC VAT. The place of supply of your
services is outside the EC."
I think your services would fall with section 13.5.2 of that document which means they are supplied in the customers country and you would not charge vat.
If you really want to be safe, it might be no harm to get guidance from your local tax office.

dbran

Hi

The relevant information is given in the table on page 44 of the VAT guide.

At the time the invoice is raised the customer has relocated to USA. It is therefore a supply to a customer outside the EU. The supplier is in Rep of Ireland (otherwise why is he being paid in euros).

There is no VAT chargeable on this transaction. (4th line of the table)

The UK is another jurisdiction and is irrelevant.

Regards and good luck:)

DB

boardswalker

dbran wrote: »

Hi

If you are invoicing anyone outside the EEC for goods or services it is zero rated. It dosent matter that they pay you in euro from an Irish account.

Regards

DB

Be careful with the above statement. It is not true to state that any sales of services outside of the EU are zero rated. The key issue is Place of Supply. You will have seen that the VAT Guide discusses place of supply.

However, it indicates that for certain services, called Fourth Schedule Services, the place of supply is deemed to be where the customer is located. Having looked at the list of Fourth Schedule Services the OPs services appear to be Fourth Schedule Services - creative design or software developement.

To the OP, yes, you can charge zero vat on the services but only because your services are "Fourth Schedule Services" as set out in the VAT legislation.
see here http://www.revenue.ie/en/tax/vat/leaflets/fourth-schedule-services.html#section3.

As for the references to the UK, our VAT law complies with VAT Directive 2006 as does the UK law. The provisions are effectively the same. We are all applying the same EU directive.

And finally a small point, the EEC no longer exists. You probably meant EU.

pontovic

Thank you all for your replies. Just to be 100% sure about this I contacted the tax office this morning and they told me that I should not charge VAT to clients outside the EU when providing an electronic based service to them. (webpage).