VAT on children's wear

Dutchie

Hope someone can help - my wife is setting up a children's wear shop. As you know children's clothes are VAT exempt in Ireland so she isn't going to register for VAT however one of her suppliers in the Netherlands where children's wear is obviously VATable will charge her VAT unless she has a VAT number even though in Ireland the stock is VAT exempt. Is there any way around this or does she just have to pay it and include it as a cost of sale?
One thing we were thinking of is importing it through an Irish VAT registered company (therefore not paying VAT) and she would purchase the stock from the Irish company but wouldn't have to pay the VAT on it as these goods aren't vatable here?
Any suggestions?? Cheers

91011

if her sales are above the vat threshold, she'll have to register. also by registering, she claims back vat on advertising, bags, phones, shopfit, esb etc etc etc.

also, as she has been informed, without an irish vat number she will be charged the prevailing vat rates of the country she is purchasing the supplies from.

children's clothing are not exempt from vat, they are zero rated up to approx. age 10 and thereafter rated at 21%. here's a link to info http://www.tecbrand.com/ey-taxwatch/indirect-taxpublications/VAT%20and%20Clothing.pdf

the paperwork involved in the vat return is minimal, so it will be well worth the effort.

Dutchie

Thanks for the reply 91101. She hadn't intended on registering for VAT because most of her products will be zero rated but perhaps it makes sense that she should because she will probably encounter the same problem with different suppliers across the EU. I realise there is a threshold of about €75k of sales before you are required to register for VAT but will she be allowed register anyway, even if her sales are less than the threshold (as a start-up it's difficult to know what her sales will be, beyond forecasts etc.)
Thanks again

CompFix

You can register for VAT even if you have sales of €10 per year. The €75k limit is when you have to officially register for it.

RUDOLF289

CompFix wrote: »

You can register for VAT even if you have sales of €10 per year. The €75k limit is when you have to officially register for it.

Hello Dutchie,

you have already received comprehensive replies.

Please note that the treshold for registering for VAT if you are involved in Intra Community Acquisitions (i.e. goods bought within the EU) is actually 41000 Euro.

Also be aware, if you import more than 191000 Euro per annum from other EU member states, you will have to file INTRASTAT returns.

As already advised, you can opt to register for VAT even if you are likely to stay below the thresholds.

Cheers,
Rudolf289

TheCostumeShop.ie: Ronan

In your situation it makes sense to register for Vat to claim vat expenses back on purchases and use the vat number for intra EU transactions.

Dutchie

Thanks for the help. Think the best thing for her to do is to register for VAT as she will experience this in all EU countries. Cheers

bouncycastle

Hi i saw this post lately and was just wondering did ye set up the shop and how are things as my wife is thinking of doing the same any advice?