[ic] VAT numbers in EU at shipping or billing ?

Kevin Walsh kevin at cursor.biz
Fri Jun 3 12:20:06 EDT 2005

> Kevin Walsh wrote:
> > Use the billing address for tax calculations.  If the buyer and
> > the seller are in Europe or the UK then VAT is payable.  It doesn't
> > really matter where the goods are going.
> >
> I can't use only the biling address, the buttomline about 'no' VAT, is
> if the custommer is 'home' in another EU country, _and_ the goods are
> _physical_ shipped to that contry...
You might be right - I'd have to look that up.  I'm pretty sure that
the last time I checked into this the VAT rules applied to the
purchaser's address, and not to the final destination of the goods.
Perhaps the rules change when VAT numbers are exchanged instead of

I found this in the euopa.eu.int VIES VAT FAQ:

    Q8: Do I need to have a valid VAT identification number for my
        customer before I make an intra-Community supply?

    A8: To make an intra-Community supply without charging VAT, you
        should ensure that the person to whom you are supplying the
        goods is a taxable person in another Member State, and that
        the goods in question have left, or will leave your Member
        State to another MS.  VAT-number should also be in the invoice.

So, without finding/reading the full rules, it would seem that the
goods might not have to go to the same country as the invoice;  The
goods and the invoice just have to leave my country.  The full rules
probably tighten up the wording somewhat.

> Also my client want's to be able to sell without DK-VAT, because it is
> 25%, and the goods looks so expensive, so if you reduce the price with
> the DK VAT, the products 'looks cheaper', even that the purchaser have
> to pay local, non DK, VAT. (in reallity, a EU company is entitled to
> purcase a 'goods' in another EU country without local VAT, but in some
> places are funny rules, if I purchase at amazone UK, the first charge
> full VAT, and afterwards they (amazon) returns the VAT om my CC account. )
Wow - 25%?  You should complain. :-)

Can't you just show the prices with and without VAT on the same
page?  My company is VAT registered, so I just ignore the "inc. VAT"
prices;  I know I'll "get the money back" (depending upon what I'm
buying) when the next VAT return is filed.  Any company with VAT
registration should be able to see past the "inc. VAT" price as long
as your pages make it clear which prices include VAT and which don't.
You shouldn't look expensive - even with that unjustifiable VAT rate.

You need to get the actual rules from somewhere official, take a
printed copy and check the rules for changes every now and again.
Once you have the rules, the implementation will not be difficult.

> To check against fraud, every custommer will be checked against VIAS,
> and probally somehow have to prove their VAT number on the first deal.
> Also it is possible to ask our local tax authorities, if the VAT number
> and destination/billing address matches)
> If this is done, my client won't be liable for other fraudsters (that
> what the locate tax authorities just told me on the phone)
As long as you have checked with the proper authority, and have proof
of those checks (you might be asked to show proof five years later),
you'll be fine.  That's just too much like hard work for me, so I just
charge everyone in the UK and Europe VAT (at 17.5%) and let them
"claim it back" along with all the rest of the VAT they want to offset.

If someone in Europe really wanted me to not charge them VAT then I
would put the onus on them to show that their VAT registration is
valid.  I'd do a VIAS check, but I wouldn't leave it at that.  A faxed
copy of their VAT registration document, along with a covering letter
(with their letterhead) would probably allow me to defend myself to a
spotty, 12-year-old, pencil-pushing bean counter from the tax office
if I ever needed to do that.

   _/   _/  _/_/_/_/  _/    _/  _/_/_/  _/    _/
  _/_/_/   _/_/      _/    _/    _/    _/_/  _/   K e v i n   W a l s h
 _/ _/    _/          _/ _/     _/    _/  _/_/    kevin at cursor.biz
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