VAT registration

craigm

Quick question,

I'm setting up a sole trader business and am filling out TR1 including the registration for VAT section as I need a VAT ID for B2B reverse charges.

The problem is the the box I have to tick which states "(iii) you are in receipt of business to business services where the reverse charge to (iii)
VAT applies? Attach a copy of the invoice if this is the case."

I haven't started yet so I don't have any invoices from the business(I think this is what they mean? it's advertising networks who have a fields where I can put in the VAT ID).

What do I do? Will I make a transaction including the 23% VAT charge and print out the receipt and send it along with the form?

Also would I be right in saying that my business is a B2B service business supplying services to a business outside the EU(affiliate networks in the US) thus is VAT exempt, I'm new to this so this is all pretty confusing.

Thanks for your help.

Howjoe1

craigm wrote: »

Quick question,

I'm setting up a sole trader business and am filling out TR1 including the registration for VAT section as I need a VAT ID for B2B reverse charges.

The problem is the the box I have to tick which states "(iii) you are in receipt of business to business services where the reverse charge to (iii)
VAT applies? Attach a copy of the invoice if this is the case."

I haven't started yet so I don't have any invoices from the business(I think this is what they mean? it's advertising networks who have a fields where I can put in the VAT ID).

What do I do? Will I make a transaction including the 23% VAT charge and print out the receipt and send it along with the form?

Also would I be right in saying that my business is a B2B service business supplying services to a business outside the EU(affiliate networks in the US) thus is VAT exempt, I'm new to this so this is all pretty confusing.

Thanks for your help.

"(iii) you are in receipt of business to business services where the reverse charge to (iii)
VAT applies? Attach a copy of the invoice if this is the case."


That refers to someone outside the state providing a service to you, eg Fourth Schedule services such as Advertising or telecommunication services from a supplier outside the State. Certain services received as opposed to provided for which you may have received an invoice in.

Or you sure you are ticking the right box?

craigm

Howjoe1 wrote: »

"(iii) you are in receipt of business to business services where the reverse charge to (iii)
VAT applies? Attach a copy of the invoice if this is the case."


That refers to someone outside the state providing a service to you, eg Fourth Schedule services such as Advertising or telecommunication services from a supplier outside the State. Certain services received as opposed to provided for which you may have received an invoice in.

Or you sure you are ticking the right box?

Yes it's a company providing a service to me from outside the state, I haven't done business with them yet but I will be, so I don't have any invoices yet, so I would be ticking the right box I think?

Do I need to do business with them and get an invoice 1st?

Thanks for your help!

Howjoe1

craigm wrote: »

Yes it's a company providing a service to me from outside the state, I haven't done business with them yet but I will be, so I don't have any invoices yet, so I would be ticking the right box I think?

Do I need to do business with them and get an invoice 1st?

Thanks for your help!

In that case I'd just include a note on the TR1 (Reg form) or a cover letter that you have not been invoiced as yet by the supplier of the services, but you are submitting the VAT Registration application now, to enable you account for the VAT in a timely manner and deal with any query thereafter.

They may just want the copy invoice to verify the supplier is a Bona Fida Company in these scenarios and I'd await any further instructions after the Reg form is submitted.

craigm

Howjoe1 wrote: »

In that case I'd just include a note on the TR1 (Reg form) or a cover letter that you have not been invoiced as yet by the supplier of the services, but you are submitting the VAT Registration application now, to enable you account for the VAT in a timely manner and deal with any query thereafter.

They may just want the copy invoice to verify the supplier is a Bona Fida Company in these scenarios and I'd await any further instructions after the Reg form is submitted.

Yeah I can do a small order with them and pay the VAT and just print off the invoice for that and that will do right?

Also, how does it even work, when I enter the VAT ID will the supplier knock off the VAT and that's the end of it or do I have to do something as well?

Thanks for the help

Alan Shore

Clearly you do not have an accountant. That would be a good start.

So you are engaged in an exempt activity in Ireland and you need to register for VAT because you are going to purchase more than €41,000 of services from a company in the EU. The supplier will invoice you without VAT but you have to account for VAT under the Reverse charge basis so you include the sales VAT probably 23% in the sales box of the VAT3 and on the basis that you are conducting an exempt activity you can't recover the VAT so you have to pay it to the Revenue Commissioners.

Howjoe1

Alan Shore wrote: »

Clearly you do not have an accountant. That would be a good start.

So you are engaged in an exempt activity in Ireland and you need to register for VAT because you are going to purchase more than €41,000 of services from a company in the EU. The supplier will invoice you without VAT but you have to account for VAT under the Reverse charge basis so you include the sales VAT probably 23% in the sales box of the VAT3 and on the basis that you are conducting an exempt activity you can't recover the VAT so you have to pay it to the Revenue Commissioners.

I thought there was no threshold limit for exempt businesses having to registered for Fourth Schedule services?

A letter or contract from the supplier would be sufficient to include with reg if no invoice has been received yet.

Alan Shore

http://www.revenue.ie/en/tax/vat/guide/registration.html#section4

Seems that the 41k only applies to goods so no threshold for services. I wonder how many organisations register?

Howjoe1

Alan Shore wrote: »

http://www.revenue.ie/en/tax/vat/guide/registration.html#section4

Seems that the 41k only applies to goods so no threshold for services. I wonder how many organisations register?

Revenue have targeted most of the exempt services providers for registration, eg banks, hospitals etc. Not sure what the OP might be doing that is VAT exempt? if a taxable business he can obviously take a matching input credit.

craigm

It's a bit of an obscure business model, basically I'm arbitraging customer acquisition costs.

A company needs leads and are willing to pay $5 for it, if I can get it for $4 I profit on the difference.

I get these customers through online advertising.

So I'm buying this advertising from some networks that are located in the EU, they have the option to enter a VAT ID otherwise I get charged 23% on top of what I pay, it says "You will be charged VAT 23% until you enter a valid VAT ID", hence why I need this to operate, being down 23% margin would make it very difficult to operate.

So I'm not really selling any goods or services per se.

These companies that are paying for the leads are all located in the US(bar 1 in the Netherlands)

Alan Shore

I think you are confusing exempt and zero rated supplies. You should go to see an accountant.