Taxation query on my web site

airtommy

Hi,

Im looking to set up a website that provides services to clients online. So for example, you send me €20 and I will proof a brochure, or dictate a recording..ect). The question is do I charge tax with people outside the country of Ireland. I see a similar website doesnt charge.

Thanks in advance

AT

DoMyBooks

When you say Tax I presume you mean VAT. If you are registered for VAT and providing a VATable service you charge VAT. At a guess your providing a service inside the state so you would always charge VAT. Its a pretty complex issue and worth checking further. Remember you dont have to register and charge VAT on services until you break the €37,500 treshold.

Obviously dont take this post as professional taxation advice!

namenotavailablE

There are a couple things you need to check out here. The following are some general points but please ensure that you verify the precise requirements for your specific circumstances [see www.revenue.ie or talk to your accountant]:

• If your annual turnover from the supply of services (rather than goods) is under 37500 then you are not required to register for VAT
• If you are required to register for VAT, the general VAT rule (and there may be exceptions for specific services- please check with the tax office) is that you only charge VAT to people living in the EU if they do not supply you with their VAT number. If a VAT registered business supplies you with its VAT number then you don't need to charge VAT [see the VIES rules on the revenue website]
• Irrespective of whether or not you are registered for VAT, if your client lives outside of the EU VAT is not charged.

Once again, it's important that you verify everything yourself independently.

airtommy

No, I know i have to charge vat but do i have charge people outside the country tax of any kind? Im a little unsure about this. For example, if i buy stock images on an american website they sometimes charge me vat.

namenotavailablE

The US company must apply the US rules.

At a guess I'd have thought that VAT shouldn't be chargeable by the US company as the sale qualifies as an export but I don't know the US rules at all- you might try e-mailing the company to see if they are correct to be charging VAT.

airtommy

thanks for the advice guys. Maybe im better off talking to my accountants to 100% sure.

wishful thinker

Who are your potential customers? businesses (in most cases vat reg) or individuals (not vat reg)? If it is the latter, then it would suit you/them you can offer a more competitive price, and you do not have to do VAT compliance.

What is your expected turnover? if it is below the threshold rates and your customers are individuals as above, then not reg for vat would seem more sensible

But, If you are not VAT reg, you cannot claim the VAT charged on services/goods that you received (e.g. VAT on telephone bill).

dbran

namenotavailabl wrote: »

[*]Irrespective of whether or not you are registered for VAT, if your client lives outside of the EU VAT is not charged.
[/LIST]
Once again, it's important that you verify everything yourself independently.

Hi namenotavailable

Unfortunately I do not believe it is that simple.

This is correct only if you are providing a 4th schedule service. If not the place of supply is Ireland and you must charge Irish VAT.

I do not believe that the service OP is providing is a 4th schedule service (but am of course open to question naturally ). It is more of a secretarial type service which would not fall within the definition of 4th schedule. It is not an electronic service by definition as although it does involve the internet, it is not operated automatically (ie as with a download of software, itunes etc) and requires a significant amount of human involvement.

The obtaining of the customers VAT number to zero rate your sales only applies if you are either selling goods or a 4th schedule services. As it is not a 4th schedule service or a supply of goods, you must also therefore charge Irish VAT to customers within EU.

So "I believe" it is Irish VAT in all cases in this particular senario? (unless I have missed something somewhere!!!)

Kind Regards

dbran

Mr. Incognito

Wow- it's amazing how complicated a simple query can get.

Hi,

Im looking to set up a website that provides services to clients online. So for example, you send me €20 and I will proof a brochure, or dictate a recording..ect). The question is do I charge tax with people outside the country of Ireland. I see a similar website doesnt charge.

Thanks in advance

AT

No. You don't charge anyone tax, in Ireland or outside it.

When your turnover starts looking like it's going to exceed 36K get yourself up to the stickies to read the Guide on VAT and register.

There's no point melting your head on the rules for VAT for what is basically a start up with little or no income. Best of luck with it anyway.

Keep an eye on your receipts as you will need to File a Form 11 in Oct 2011 and it can be difficult by then to remember sales that are current so keep a record.