My Zurich-based company will buy some bags from a London-based firm to send to a conference in Spain. Do I have to pay UK VAT? The company we are purchasing from insists that we do.
Thanks for any feedback.
fduvall
This question might be best answered by any UK expats...
If they sell to your company in Zurich, no. Only if you have a branch or partner based in the UK, that buys for you. One cannot charge the national VAT to a buyer in another country.
That's how I understand it.
OOPS - not sure about rules within the EU... thanks Weejeem! Please ignore my rambling..
how will the goods move? prepare for the vagaries of VAT triangulation
IIRC, because the supply is still to within the EU, I think that this would indeed be the case.
AFAIK based on my experience, you are only exempt on VAT if you export the goods directly out of the "economic zone". As they are being transfered direct to Spain you will have to pay VAT.
If you transferred to Zurich and then to Spain, it would be a different situation.
If you have no EU VAT number to register as the goods recipient within the EU, the UK company needs to apply VAT when selling. If the merchandise will never leave the EU, you also cannot claim it back. Depending on how large your order is, it might pay off to ship them to Switzerland first.
If the goods come via Switzelrand then no VAT if they go London to Spain then VAT as they not leaving EU.
I'm not a VAT expert but I would seriously doubt some of the comments on here.
Normally a supply of goods / services outside of the UK would not carry VAT, especially if you provide proof that the goods / services are going outside of the UK (e.g. providing a VAT number from another jurisdiction).
EU / Non-EU is often irrelevant.
I'd suggest you go through the details with your tax adviser - they should be able to answer relatively easily. Otherwise type in "place of supply VAT" in google to get some information.
I have never paid VAT from goods purchased from the UK delivered to Switzerland, although I have paid import taxes which can be steep. If you can keep the purchase price under I think is CHF 65 no duties are due, if the postal label is listed as biscuits no duty is due either....But your not selling edible hand bags...Or are you ; )
The first 5 words sums up this post.
You HAVE to provide prove the goods have left the UK, if you have a VAT number from another EU juridiction then you can use this so you do not pay UK VAT but in the jurisdiction of the EU VAT number supplied.
Without a VAT number from another EU member state and the goods remain within the EU, you pay UK VAT
Switzerland in not in the EU, therefore you can deduct VAT. If you bring goods through personaly you need to get the form stamped when you leave EU jurisdiction, by air, this would be from a UK airport by road, you would do it in Grance or Germany or Italy.
If it is sent by mail or courrier or truck, then the freight forwarder or the post office stamp on the forms is sufficient prove not to be charged UK VAT.
This is part of what the EU is all about, free customs zone....
In this case it would seem the OP wished to save the 17.5% UK VAT and import quietly into Spain without declaring, who has, i believe 19% VAT
Charming!
In the context of the situation described, what I wrote was correct, given that the person asking the question is obviously running a business and very likely to be VAT registered. A lot of the comments in the posts above are misinformed and the advice to speak to an adviser who is familiar in the circumstances is quite sensible. Wonder why I bother sometimes.
This information is correct.
i'd have to echo NickV's comments that you should take some of the 'advice' above with a pinch of salt as a lot of it is clearly wrong. speak to a VAT specialist.
for those with only experience of VAT as a consumer, i suggest you google 'place of supply' and 'reverse charge mechanism'.
fwiw, there's not enough information given to have an answer, so different posters may be assuming different things which leads to different answers.
I understand that you are going to make two transactions:
1. Intra-community aquisition of goods from the UK to Spain.
2. Distribution of the goods at a conference in Spain. (this one is not clear in your thread)
The second transaction is subject to Spanish VAT so you have to register in advance for VAT in Spain. Once registered for VAT in Spain on the first transaction you do not have to pay VAT to your UK supplier. You just need to make a reverse charge in your Spanish VAT declaration.
Please tell me more about the second transation if you want to structure the whole thing in the way that it does not trigger the obligation to register for VAT in Spain nor to pay the VAT in the UK.
Hi
Just seen this thread - I used to be a VAT consultant in the UK so hopefully I can help!
Normally, goods that are purchased in the UK and exported outside of the EU are exempt from UK VAT providing the seller has proof of export e.g. a Swiss VAT number.
However, in this instance, the goods are being sent to (acquired in) Spain and the place where VAT becomes due is Spain. Depending on the value of the goods, this is likely to trigger a VAT registration liability. You as the customer will need to account for acquisition (output) VAT (effectively charging yourself the VAT), however, you should be able to recover this VAT, usually on the same VAT return, as your input VAT.
For information, non-EU businesses that do not have an establishment in the UK and incur UK VAT on business purchases, should be able to recover this cost via a Thirteenth Directive reclaim. The claim period runs 1 July to 30 June with the claim deadline being the following 31 December.
Hope this is of some use.
To me it's clear from the OP that he is buying bags in the UK for a conference in Spain. I would guess that he is giving these bags away and not selling them. Even if he was selling them, I seriously doubt he would reach the turnover threshold required to register for Spanish VAT.
spain does not have a minimum threshold for vat registration. (at least not in 2007 which was when i had to last check).
hopefully all of the foregoing posts would have convinced the OP to get proper advice!
Wow, that is quite an assumption that the OP wants to circumvent VAT. I would never have read that from that post...
I face a similar dilema, I am starting a new business in January (carpentry) and am wanting to buy tools (mostly electrical) from the UK. As they are leaving the EU and coming to Switzerland they should be VAT free. The question/problem I have is most of the online shops I have contacted will not ship outside of the UK (I can not get a clear answer why not).
Is there a way around this using a freight forwarding company who will handle the tax side as well?
Any recommendations?
No, the UK company has to DEDUCT the VAT, as Switzerland in spite of the Bilaterals, is NOT a EU member. You of course on importation have to pay the Swiss VAT
In regard to the conference in Spain things should be investigated with the Spanish partner. For the importation into Spain, quite a different invoice, showing the CH company as seller, is to be issued, declaring something like "samples of no commercial value for free distribution" and a "statistical value" of maybe CHF 20.--