Revenue Won't Pay VAT Due Back

Jasonsc

I formed a company in November 2014, and my first VAT return was due for Nov/Dec on the 19th of Jan.

All of my sales were B2B transactions with the customer companies being based in the US, so I charged no VAT for the period. Most of my expenses were also in the US, but I did have some expenses with a company that has an Irish HQ - Facebook.

I paid about €2000 in VAT to Facebook in Nov/Dec, and this was not offset by any VAT charged. My VAT returns were filed on time through my accountant. However, the accountant was told my Revenue that the invoices I got from Facebook are insufficient to claim the VAT back.

The invoices have the figures listed in $USD. Facebooks Irish VAT number, my advertising account number, and the invoice number are all clearly displayed on the invoices. And, as well, there is a clear breakdown of net charge, VAT charge, and total charge.

My accountant has told me that Revenue will not pay the VAT back, unless I can get invoices from Facebook which are listed in €EUR.

I contacted Facebook, but they can't help. Their invoicing system is automatic based on expenses accrued in their self-serve advertising system, and I think it's understandable that they can't go back in time to manually re-issue invoices in a different currency.

I went to significant effort to ensure that I had all my invoices in order - in my accounting records I also have recorded exchange rates for the invoices dates. The charge in $USD, exchange rate, and equivalent €EUR values are also all listed on my bank statement, and they match the invoices perfectly.

Whether invoices are listed in $USD or €EUR, what's the difference? Whether you have €1 or $1.10, it's still the same value. Regardless of the symbol listed on the invoices, the transaction value is the same, and I have everything appropriately and carefully recorded. To me, this seems like either laziness on the behalf of Revenue staff, or some sort of policy that can be used to avoid paying out VAT.

My accountant wasn't much help. I was told that it's generally pretty black and white with Revenue, and if I can't get the invoices I won't be getting the VAT back.

Last week, I tried several times to contact the VAT department in the Fingal office. After going through the phone tree, it rings to a phone in the VAT office, gets no answer, and bumps me back into the phone tree. I also sent a concise email explaining the situation and asking for the reasoning to be explained last Tuesday (24/2) and as of today (5/3), I have not gotten a response. I've tried to get in touch with the same VAT department by phone this week also, and have had no luck.

I'm not really sure what to do here. I mean, am I just meant to let the €2,000 go? If that's the way it's going to go, this system seems more broken than I thought it was.

Any advice or insight would be appreciated.

Cheers,
Jason

Valetta

See section 18.

http://www.revenue.ie/en/tax/vat/guide/credit-notes.html#section3

I would write to Facebook outlining your problem, quoting the paragraph referred to.

Try to get a response in writing from them and forward this on to revenue.

Other than that I'm not sure what else you can do.

dogsears

VAT invoicing requirements are strict, and laid down by EU regulation - one of which says that the amounts on the invoice may be expressed in any currency, provided that the amount of VAT payable is expressed in the national currency of the relevant EU country i.e. Ireland.

So, if Facebook won't issue you with an invoice that shows the VAT part in Euro - they can leave everything else alone - their invoice is not a valid invoice and Revenue do not have to refund you (and of course without a valid VAT invoice you didn't need to pay the VAT to Facebook and as you've now done so, you could seek this back from them, but hopefully you won't need to go there).

In the first instance I would go back to Facebook.

If you need to quote something (not just to Facebook - maybe you'll want to talk to your accountant again) its Regulation 230 of Council Directive 2006/112/EC (as updated by Art 1(19) of Council Directive 2010/45/EU).

Jasonsc

Thanks for the helpful information, that's certainly cleared things up.

I also have a follow-up question. I've just received an invoice from a UK registered company, with the net/VAT/total breakdown listed in sterling. In order for me to claim this VAT back from the Irish government, I will need this invoice redone in Euro, is that correct?

Also, my father told me that I should give my VAT number to this company, and then they won't (need to) charge me VAT. Is this the norm? I don't want to suggest this to the company and come off as an idiot. Being able to do that, however, would be much preferable.

Thanks!

Valetta

Jasonsc wrote: »

Thanks for the helpful information, that's certainly cleared things up.

I also have a follow-up question. I've just received an invoice from a UK registered company, with the net/VAT/total breakdown listed in sterling. In order for me to claim this VAT back from the Irish government, I will need this invoice redone in Euro, is that correct?

Also, my father told me that I should give my VAT number to this company, and then they won't (need to) charge me VAT. Is this the norm? I don't want to suggest this to the company and come off as an idiot. Being able to do that, however, would be much preferable.

Thanks!

Have you paid the invoice?

Was it for goods that were shipped to Ireland, or was it for services, and if so, where were the services provided?

If you can supply them with an Irish VAT number, and the invoice was for goods shipped to Ireland, then they may issue a credit note and re-issue the invoice with no UK VAT.

Otherwise you claim the UK VAT back from the UK revenue, but I know from experience that it's a difficult enough process.

Mr. Incognito

If you give your Irish VAT number you must self account for the VAT at the Irish rate in your own vat return.

It's not that it is not charged but rather you charge it to yourself

Jasonsc

Thanks again for the replies.

I have not yet paid the invoice, and this was for a service. I'm an internet marketer and was purchasing web traffic from an English company. Almost all my revenue comes from US companies, so having to pay VAT and try to claim it back without being able to charge any VAT to offset it makes things awkward.

Thanks for that explanation Incognito.

I'll trying to drum up some business within the EU shortly, so hopefully this will have me in a situation where I'm charging more VAT than I'm paying. But until then, what's the best way to do this?

In giving the company my VAT number and then "charging the VAT to myself" - what does that mean exactly? I account for it, and then subtract it from the amount of VAT I charged (which, as mentioned, is currently none)? If that's the case, it seems like the better option so I wouldn't have to go to the trouble of trying to claim back from the Revenue.

The current invoice isn't too large and I wouldn't mind just paying it to get it sorted - I won't be using this company again for a while, and so my questions above are basically so I'll know how to setup properly when I go back to them.

For this current invoice, am I right in thinking that I will need to have it re-issued in € though, to allow me to claim the VAT back?