VAT on overseas travel agents booking.com

askaboutit

VAT on overseas travel agents booking.com


I am a small B&B under the threshold for VAT. I want to advertise on booking.com, airbnb and homeaway which are companies registered outside of Ireland. All of these charges commission on the booking service. Does the VAT threshold still apply or will I have to register for VAT?

Gloomtastic!

VAT is based on revenue achieved throughout the tax year, not on costs/profit. So, as you are not VAT registered, you will have to pay the VAT as part of your cost of commission.

Hope that helps.

VincePP

If you were vat registered you could claim the vat back on the booking commissions, (and other vatable items used for the b&b) but you would also have to charge vat on the accommodation.

As most breakfast food has no vat, and you wouldn't be buying bed linen too often, it wouldn't be worth while to register unless you exceed the threshold.

askaboutit

Gloomtastic. Are you saying that I would have to register for VAT if I was to join these online travel agents. Would that mean I would have to charge VAT on all my business even the business that does not come through those OTNs.

askaboutit

VincePP wrote: »

If you were vat registered you could claim the vat back on the booking commissions, (and other vatable items used for the b&b) but you would also have to charge vat on the accommodation.

As most breakfast food has no vat, and you wouldn't be buying bed linen too often, it wouldn't be worth while to register unless you exceed the threshold.

I don't wish to register for VAT as I am under the threshold and I would not have enough to claim back. My question is if I use these Online companies who are providing a service from a company not registerd in Ireland and they charge VAT on their commission would I be obliged to register for VAT.

jimmii

askaboutit wrote: »

I don't wish to register for VAT as I am under the threshold and I would not have enough to claim back. My question is if I use these Online companies who are providing a service from a company not registerd in Ireland and they charge VAT on their commission would I be obliged to register for VAT.

No you wouldn't.

askaboutit

Hi Have you disabled my post or removed it re VAT on booking.com. I am trying to find an answer to this question and I do not know how to explain it without using the name booking.com. Can you help?

ted1

askaboutit wrote: »

I don't wish to register for VAT as I am under the threshold and I would not have enough to claim back. My question is if I use these Online companies who are providing a service from a company not registerd in Ireland and they charge VAT on their commission would I be obliged to register for VAT.

They should be registered in Ireland , if they do more than €75k business here then they need to register

ted1

askaboutit wrote: »

I don't wish to register for VAT as I am under the threshold and I would not have enough to claim back. My question is if I use these Online companies who are providing a service from a company not registerd in Ireland and they charge VAT on their commission would I be obliged to register for VAT.

No you just pay the VAT, if you had a VAT number you would give them it and they wouldn't charge you VAT

Gloomtastic!

ted1 wrote: »

They should be registered in Ireland , if they do more than €75k business here then they need to register

Supply of services threshold is €37.5k......

wolrac

Reading the previous posts my understanding is: If booking.com and other booking websites are doing more than €75k worth of business in Ireland they then have to be registered for VAT here. Therefore a person doing less than €37,500 business would not have to register for VAT doing business with companies like booking.com Is this correct.

mrawkward

wolrac wrote: »

Reading the previous posts my understanding is: If booking.com and other booking websites are doing more than €75k worth of business in Ireland they then have to be registered for VAT here. Therefore a person doing less than €37,500 business would not have to register for VAT doing business with companies like booking.com Is this correct.

Vat threshold is based on sales not purchases!

wolrac

Let me rephrase my question. If booking.com and other accommodation sale/booking websites have sales of over €75,000 in Ireland should they not be registered here in Ireland for VAT?
If that is the case:
Should an accommodation provider listed on the booking.com website, that has total sales from all sources, of under €37,500 have to register for VAT to advertise on the booking.com website?

grogi

wolrac wrote: »

Let me rephrase my question. If booking.com and other accommodation sale/booking websites have sales of over €75,000 in Ireland should they not be registered here in Ireland for VAT?
If that is the case:
Should an accommodation provider listed on the booking.com website, that has total sales from all sources, of under €37,500 have to register for VAT to advertise on the booking.com website?

But do they sell services in Ireland?

They only provide booking service, it does not need to be tied to location in the country here...

exaisle

ted1 wrote: »

They should be registered in Ireland , if they do more than €75k business here then they need to register

No. There is NO registration threshold for foreign businesses selling online services to end consumers. They must register regardless whether they are EU or non-EU based.

DubTony

Holy crap. What a cluster**** of a thread.

dbran

askaboutit wrote: »

VAT on overseas travel agents booking.com


I am a small B&B under the threshold for VAT. I want to advertise on booking.com, airbnb and homeaway which are companies registered outside of Ireland. All of these charges commission on the booking service. Does the VAT threshold still apply or will I have to register for VAT?

There is a lot of "fluff" in this thread and the answer is complex. Lets just break down the facts to make it more simple.

OP is running a "business", is the customer and is based in Ireland.

Booking.com, airbnb etc are providing the service of an intermediary and are based outside the state and charge a commission to the OP.

Thus the relationship is a B2B relationship.

The place of supply of such a service is Ireland as that is the place the business customer is situated.

The OP must therefore register and account for VAT on the commission charged from the intermediary on a reverse charge basis. There is no threshold for this type of registration for VAT.

The other question raised is, does the normal VAT registration threshold of €37k apply.

The answer is the OP must account for VAT for the purpose of operating the reverse charge mechanisim. However if the turnover of the business is below the threshold amount of €37.5k and they do not wish to register for VAT they do not have to register. They do not have to charge VAT on their sales but are not entitled to deduct any Irish VAT suffered on purchases (or any VAT on which the reverse charge mechanisim applies).

So in summary;

1) You must register for VAT to account for the reverse charge on the commission charged by the intermediary alone. But when you are completing the TR1/TR2 there is a box that you need to tick which means that you are only accounting for VAT in order to operate the reverse charge mechanisim and for no other purpose.
2) You give the intermediary your Irish VAT number so that you do not get charged any foreign VAT in error.
2) If the commission charged is say €1000 and the applicable Irish VAT rate is presumably 23% you will add €230 to the vat on the sales and you will pay this amount over to revenue.
3) You do not need to account for VAT on your sales until your turnover goes above €37500.

I hope this is clear.

dbran

askaboutit

They charge VAT on the commission. Is their something about reverse VAT charges? Does anyone know the correct information?

mrawkward

askaboutit wrote: »

They charge VAT on the commission. Is their something about reverse VAT charges? Does anyone know the correct information?

Brilliant Ted!!

dbran

askaboutit wrote: »

They charge VAT on the commission. Is their something about reverse VAT charges? Does anyone know the correct information?

If you dont understand this sort of thing then you are really best to talk with your local accountant about it.

Best Regards


dbran

StupidLikeAFox

askaboutit wrote: »

They charge VAT on the commission. Is their something about reverse VAT charges? Does anyone know the correct information?

There are two separate issues here.

1. Whether you should register for VAT. It sounds like you are below the threshold so you are not required to register by law, but you can still register if you want to. Here is a fairly simple guide.

2. The booking websites charge vat on their commission. If their commission is €123 then that will be €100 commission + €23 VAT (assuming the rate is 23%, it might be different)

• If you are not VAT registered you pay the €123 and thats that - that is the cost to you.
• If you are VAT registered and they are VAT registered in Ireland, you pay the €123. However when you make your VAT return, you add up the VAT you have collected on sales, the subtract the VAT you have paid on purchases, and then pay Revenue the difference (or claim a refund depending on which figure is higher)
• If you are VAT registered and they are VAT registered in the EU, you pay no VAT at point of sale, but you must record the VAT you would have paid in Ireland as a purchase but also as a sale, so they cancel each other out on your return. Its a very quirky feature of the Revenue rules, but there you go. I did a quick google search and this page probably explains it better than I could

askaboutit

All very confusing. No one has given be a definitive answer.

dbran

Hi

You were told to go and see your accountant about this.

You will only get more confused here.

If you don't have an accountant it is probably time that you got one.

Thread closed.

Dbran