VAT on consultancy work

[Marina Stone]

If I am doing consultancy work for a company overseas do I need to charge them VAT?

If exporting a product, normally tax is paid by the recipient when they import. However, what happens with service related invoices?

Marina

[BMS]

Hi Marine

If the overseas company is an EU company and they are VAT registered then yuo do not charge VAT as long as you qoute their EU VAT registration on you invoice...........


Interesting point though as I answered a similiar question on another forum recently and said it had to go on the VAT return as an EC sale, bt was told that was just for goods exported, maybe someone would like to confirm this !

[Alpha]

Whether VAT is chargeable depends upon the point of supply and for services the supply is taken as being 'where you belong' (usually the place from where you conduct your business which in the case of a limited company is where it was legally constituted).

This is the basic rule however there are special rules which can be applied particularly with services realting to land and property, physical performance(eg performing arts), passenger transport and telecommunications.

I believe in your case as in my own that if you supply your services to a customer in the EU the 'place of supply' is deemed to be in the country of the customer therefore providing you have a valid VAT registration number you do not account for VAT but your customer must account for it in his own country.

If no valid VAT registration is obtained then you must charge VAT.
(Note if the customers VAT registration is a UK one you would have to charge VAT).

If the customer is outside the EU then no VAT is charged.

For BMS

I can confirm that the EC Sales list is for recording supplies of goods and related services eg freight, shipping etc only not services

[Marina Stone]

Thanks BMS

It seems for goods exported to EU is quite straight forward!

The country in question for the consultancy work is Bahrain.

It's all very complicated but need to make sure I get it right otherwise I am sure I will get stung for it!!!

Perhaps there's someone on this forum who can clarify :?

Marina

[Marina Stone]

If the customer is outside the EU then no VAT is charged.

That my problem sorted, thanks Alan

[BMS]

Hi Marina

Fairly safe to say that Bahrain is not in EU....