How does VAT work between EU countries?

[Sir Og]

There must be some people on the boards who have experience/knowledge of how VAT works between two European countries.

For example if company A (French company, based in France) sells some goods to company B (English company, based in the UK) for €1000. Will A issue an invoice for €1000 + VAT (don't know what the rate is in France) or the invoice from company A will be for €1000 without VAT and B will have to pay import VAT in England.

Also how would the above example look like if it was a service performed by A in France and invoiced to B.

[Saras]

We just got invoiced by an Estonian design agency. They need our VAT number and invoice us VAT free. Then Estonian and Lithuanian taxmen see their annual VAT invoices and pay the net sum to one of them.

[Sir Og]

This means that your company will have to pay a sort of import VAT. Where would your government take money to pay to Estonian government if this is the only deal between the two contries?

[Saras]

No, we don't pay any VAT. They will not pay the Estonian taxmen anything either. In fact, I'm now confused and will seek tax advice :|

[Sir Og]

I thought that VAT between EU countries worked as VAT inside a given country.
I got this impression from the incorrect invoices that I have received in the past. Every now and again I would receive an invoice from an EU company with VAT. I always thought that this is because they think that Bulgaria is an EU country and invoice us as they would invoice an EU company. It could be of course that they fought that we were a company from their own country but this is more unlikely.

[Starchild]

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm

VAT and all its mysteries!

VAT on imports and exports

For the purpose of exports between the Community and non-member countries, no VAT is charged on the transaction and the VAT already paid on the inputs of the good for export is deducted - this is an exemption with the right to deduct the input VAT, sometimes called ‘zero-rating’. There is thus no residual VAT contained in the export price.

However, as far as imports are concerned, VAT must be paid at the moment the goods are imported so they are immediately placed on the same footing as equivalent goods produced in the Community. Taxable people registered for VAT will be allowed to deduct this VAT in their next VAT return.
VAT on goods moving between Member States

No frontier controls exist between Member States and therefore VAT on goods traded between EU Member States is not collected at the internal frontier between tax jurisdictions.

Goods supplied between taxable persons (or VAT registered traders) are exempted with a right to deduct the input VAT (zero-rated) on despatch if they are sent to another Member States to a person who can give his VAT number in another Member State. This is known as an “intra-Community supply”. The VAT number can be checked using the VAT Information Exchange System (VIES).

The VAT due on the transaction is payable on acquisition of the goods by the taxable customer in the Member State where the goods arrive. This is known as “intra-Community acquisition”. The customer accounts for any VAT due in his normal VAT return at the rate in force in the country of destination.

[Ecthy]

Re: How does VAT work between EU countries?

Originally posted by Sir Og from BULGARIA
How does VAT work between EU countries?

I'll bet €10,000 that you'll never know from personal experience

[Sir Og]

Como esta Ecthy?

Seems like RL is keeping you busy.

[Sir Og]

Thanks for the link Starchild.

VAT ralated to sale of goods is prety clear now, but is it the same with services?

Also I don't really see the difference between an EU company importing/buying from a non EU country and an EU country.

VAT must be paid at the moment the goods are imported

vs

VAT due on the transaction is payable on acquisition of the goods by the taxable customer in the Member State where the goods arrive.

[Provost Harrison]

Am I too late to answer this one?...I bill companies in other EU countries all the time...no VAT, but you have to declare it...this is dealt with by treaties between the EU states where they calculate who owes who and how much...

[C0ckney]

i opened this thread and thought that starchild and saras had come back. then i saw the date.

[Dauphin]

Am I too late to answer this one?...I bill companies in other EU countries all the time...no VAT, but you have to declare it...this is dealt with by treaties between the EU states where they calculate who owes who and how much...

Why on Earth are you answering this now. Except to declare your MTIC fraud?

[Provost Harrison]

It popped up as a suggestion from another thread. I thought it might be something interesting.

And C0ckney, no one is coming back...they have all been replaced by tw@ts I'm afraid

[N35t0r]

***** who paint their Audis green

[Provost Harrison]

***** who paint their Audis green

Audi painted the Audi green, knobhead.