Vat on Services from Holland

Tootoo

I am using a Dutch company to design a lot of my marketing material. I am registered for Vat and so are they. They have now invoiced me for the design work that they have and have charged me Vat. I am trying to work out if I must firstly pay this Vat and, if so, if I can claim it back by any means ??:(

Mr. Incognito

VAT on professional services is where they are performed.

In this case Holland.

Yes you must pay it.

Yes you can claim a deduction for it in your VAT returns.

Tootoo

I asked my accountant and they said that I couldn't, please can you let me know if that is anywhere in writing so that I can direct him there.

aidan.connolly

Hi,

I would agree with your accountant but it would be worth looking at a couple of options.

There is a process for recovering foreign vat , covered by what is named the 8th EU Directive, but I am not sure if this is covered and it is a slow process with many rules.
Another posibility is if the services you are receiveing are deemed to be "Fourth Schedule" then the services are deemed to take place in the country where you are located, which means you don't pay Vat, and you "self account" for the vat in your vat return.

I would ask you accountant again and go with whatever he says.

smcgiff

You'll have to register with the Dutch Revenue and claim the VAT back from them I'm afraid.

Mr. Incognito

My apologies,

I think this may be 6th schedule services which are taxed where they are received in this case in Ireland.

sawilson2003

The VAT should not have been invoiced to you from Holland, as you are both registered for VAT in your respective EU countries. Marketing Services would be classified as fourth schedule services.

Supply of Fourth Schedule Services to a business customer outside the State

16. When an Irish business supplies a taxable Fourth Schedule service to a business customer established in another EU Member State or outside the EU, there is no liability to Irish VAT i.e. they are effectively zero rated. In such cases the place of supply is deemed to be the place of establishment of the recipient. Where the customer is established in another EU Member State, VAT is accounted for in that Member State. Where the customer is in business in another Member State but is not registered for VAT, the Irish supplier of Fourth Schedule Services should still apply the effective zero rate of VAT to the supply. (Therefore this applies when the services are received from another member state)

If you make the company aware that you are registered for VAT and give your VAT registration number, they should issue you with a credit note and re-invoice at 0%

You then need to do the following on your VAT return for the relevant period. You calculate the VAT at the rate that would be used if these services were supplied between two irish companies.
Fourth Schedule Services received from outside the State

4. Persons registered for VAT in the normal course of business who receive any of the taxable services listed in the Fourth Schedule from outside the State must account in Box T1 in their periodic VAT returns, along with their other VAT liabilities, on the invoiced amounts at the appropriate rate as if they had themselves made the supply. They must furnish their VAT number to the supplier. They are entitled to a credit for such VAT accounted for, in Box T2 of the return.

NOTE: If these services relate to PROPERTY transactions different rules may apply

hope this helps.

Mark_Mc

The information below is accurate. You would need to self account for VAT by applying the Irish rate that would have applied if you had received it from an Irish supplier and record this in your sales VAT figure. You can then also put the same figure into your purchases VAT total if it's a business expense which you say it is. That way you don't actually hand out any cash for VAT. It is important that you have the correct figures in your VAT return to avoid falling foul of technical breaches of tax law.

sawilson2003 wrote: »

The VAT should not have been invoiced to you from Holland, as you are both registered for VAT in your respective EU countries. Marketing Services would be classified as fourth schedule services.

Supply of Fourth Schedule Services to a business customer outside the State

16. When an Irish business supplies a taxable Fourth Schedule service to a business customer established in another EU Member State or outside the EU, there is no liability to Irish VAT i.e. they are effectively zero rated. In such cases the place of supply is deemed to be the place of establishment of the recipient. Where the customer is established in another EU Member State, VAT is accounted for in that Member State. Where the customer is in business in another Member State but is not registered for VAT, the Irish supplier of Fourth Schedule Services should still apply the effective zero rate of VAT to the supply. (Therefore this applies when the services are received from another member state)

If you make the company aware that you are registered for VAT and give your VAT registration number, they should issue you with a credit note and re-invoice at 0%

You then need to do the following on your VAT return for the relevant period. You calculate the VAT at the rate that would be used if these services were supplied between two irish companies.
Fourth Schedule Services received from outside the State

4. Persons registered for VAT in the normal course of business who receive any of the taxable services listed in the Fourth Schedule from outside the State must account in Box T1 in their periodic VAT returns, along with their other VAT liabilities, on the invoiced amounts at the appropriate rate as if they had themselves made the supply. They must furnish their VAT number to the supplier. They are entitled to a credit for such VAT accounted for, in Box T2 of the return.

NOTE: If these services relate to PROPERTY transactions different rules may apply

hope this helps.