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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3826
Experience:  20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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We are a company based in the US that sells art on line in

Customer Question

We are a company based in the US that sells art on line in the UK through UK portals such as Wayfair, et al. We ship the product from a warehouse in the UK...but it is a3rd party warehouse that invoices us for the product. We need to know if we are supposed to register for a VAT number for this and also if we are required to file/pay VAT taxes. We pay VAT taxes to the warehouse that actually manufactures the art to ship out for us.
Submitted: 2 years ago.
Category: Tax
Expert:  Barbara replied 2 years ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you today.

VAT is imposed on all sales in a supply chain involving the production and the distribution of goods, and the provision of services for consumption within the territory of the EU. Hence, both goods and services are subject to VAT, and where there is consumption of these in the EU, there is a business (irrespective of the place of principal seat) liable to charge VAT.

In a supply chain VAT can never accumulate and paying VAT over VAT is prohibited. The ‘end user’ pays VAT
and the business charging it acts as the collector. Since a business cannot be considered as an end user, businesses can reclaim VAT paid on purchases. On one hand, a business that is liable for VAT should pay VAT collected from end users to the tax authority, and on the other hand a business can reclaim any VAT paid to suppliers and on import of goods at the same time. In other words, VAT should not create a cost of doing business.

In other words, you will charge and collect VAT from your customers, but will reclaim the VAT paid to the warehouse.

The following link contains excellent information you will find helpful:

http://rsmi.com/publications/border-crossing/490-europe-how-european-vat-impacts-us-companies.html

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

Expert:  Barbara replied 2 years ago.

Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts JustAnswer to compensate for a portion of the fee you paid.

Best regards,

Barb