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VAT between Ireland and Pakistan

  • 15-03-2013 2:40pm
    #1
    Kitchen Expert
    Registered Users, Registered Users 2 Posts: 82 ✭✭


    Hi,

    I got a freelance web developer in Pakistan to do work for me through Elance. His invoice is in US Dollars which I presume is because Elance use it as a common currency.

    However, his invoice does not have any mention of VAT and I am wondering if maybe it is VAT exempt or if it includes VAT and I can claim it back?

    Thanks in advance.


Comments

  • #2
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    Hi

    You have received a 4th schedule services from a business customer outside the EU in connection with a busines. The place of supply is therefore Ireland. Therefore the liability to account for VAT is with the recipient of the service, which is you. You will account for VAT by use of the reverse charge mechanisim.

    This means that you compute the relevant amount of VAT using the applicable Irish rate which is 23% and add this figure to the vat on sales box on your Vat return. At the same time you are entitled to a similar vat credit and you add the same figure to the vat on purchases box on the VAt return.

    Basically you charge yourself VAT and take an equivalent deduction thus no net effect or actual VAT amount is required to be paid.

    Hope this helps

    dbran


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