Charging VAT to a foreigner - urgent

Adam_L

First of all, hello to all...I really appreciate any kind of help with this issue as it's a bit complicated.

I'm a non-EU citizen who has been working and living in Ireland for the past 2 years. I'm about to leave Ireland next month and return to my country, but am currently in negotiation with the Irish company I work for to continue working for them from home. As I can't be registered in Ireland any more, they want me to set up a business in my country and invoice them with a receipt for my services each month. All of that is fine, but we're stuck at negotiations because they find it to expensive to pay VAT on top of my income.

So to explain in detail. The service I would be providing to them is of consulting nature and from what I've researched, falls under the "Fourth schedule" services. I invoice the company each month, and according to them and this :

http://www.revenue.ie/en/tax/vat/leaflets/fourth-schedule-services.html#section12

They would still have to pay VAT in Ireland on top of that, even though I'm not charging them with VAT and I don't have to pay it in my country. What I'd like to know now is are they entitled to return of that VAT, or if there's any other way of setting up a similar way of doing business with them.

Really, really appreciate any sort of response,

Thanks in advance

smcgiff

As long as they are VAT registered they will not lose out.

Adam_L

They're probably amongst top 50 Irish companies, if not higher, so I'm pretty sure they are registered for VAT. I know I'm asking for a lot, but could someone who's a bit more familiar with the matter than me just give me a link, or point me to a place where I could find it, where it says that they're entitled for VAT return. It's really not that I don't believe you, on the contrary, it's just that it will be easier for me to show them that in an official source.

Thanks again

dbran

Hi

4th schedule services are now defunct since 1/1/10.

I think these are the new rules for charging VAT outside Ireland.

http://www.revenue.ie/en/tax/vat/leaflets/place-of-supply-of-services.html

Kind Regards


Dbran

mozattack

4th Schedule Services are NOT defunct from 1st Jan 2010. Yes the supply of services rules have changed but 4th Schedule more or less remain as is.

mozattack

To answer your question - the Irish business accounts for VAT on the reverse charge basis - you don't charge VAT, they self-account for it.

Transaction is VAT neutral provided they can reclaim the VAT and the supply is not being directed to an exempt use.

Adam_L

mozattack wrote: »

To answer your question - the Irish business accounts for VAT on the reverse charge basis - you don't charge VAT, they self-account for it.

Transaction is VAT neutral provided they can reclaim the VAT and the supply is not being directed to an exempt use.

Thanks for the answers.