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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
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Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I have asked by a new customer, a German bank who are closing

Resolved Question:

I have asked by a new customer, a German bank who are closing their London Office to use VAT Reversal charge procedure on our invoice. We are simply moving their IT equipment from one location to another within London. They have supplied me with their German VAT registration number and the invoice will be addressed to the Berlin office. Does this mean I do not charge any vat on the service and how do I account for this on my VAT return and invoice
Submitted: 10 months ago.
Category: Finance
Expert:  Rakhi Vasavada replied 10 months ago.
Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

On your invoice, you will not charge any VAT but put a clear statement indicating that liability of VAT payment is reversed. Let me explain you the mechanism in detail.

"Reverse Charge" is a part of the VAT law in a growing number of European countries.

It states that the VAT (Value Added Tax) for Goods and Services delivered inside the country by a foreign company is owed by the recipient of the goods and not by the foreign service provider/supplier.

VAT must not be charged on invoices to the recipient. By law, a clear statement must appear on each of these invoices indicating that the liability for the payment of VAT is reversed to the recipient.

The recipient has to calculate, report and pay the VAT (it may be recoverable if the recipient is VAT registered).

The foreign service provider/supplier may be entitled to a VAT refund claim for all VAT charges by local suppliers.

I am more than sure this would help. You may please leave a positive rating if this helped as this is the only way we are compensated for helping you. Alternatively, please feel absolutely free to revert back with a reply if you need further assistance.

Warm Regards,

Customer: replied 10 months ago.

OK, so to make sure I have it correct, all I need to do is declare Reverse Charge and enter the clients VAT number which they have provided . On my VAT return however, do I enter this sale in Box 8 as supplies of goods to EC member states

Expert:  Rakhi Vasavada replied 10 months ago.
Dear XXXXXe,

Hello and welcome again. Thank you for your follow up reply.

Yes, I conform that you have got it absolutely right. All you will need to do is declare Reverse Charge and enter the clients VAT number which they have provided. And yes, you would enter this sale in Box 8 as supplies of goods to EC member states.

I am sure this would help.

Warm Regards
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 3839
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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