Charliebrown
7th July 2009, 11:34
My client (UK VAT registered limited company) sells products via various websites (eg Amazon.co.uk) where the product is shipped directly from the supplier (located outside of the EU) to the customer (who may be located in the EU). From analysing the terms and conditions of the sale agreement it has been determined that the sales of the products are outside the scope of UK VAT on the basis that the purchaser of the products takes ownership of the goods before they enter the EU. In this respect it is the purchaser that is responsible for meeting any import / VAT charges.
The websites that are used to market the products are administered from Luxembourg and invoices for the services are received by my client without any VAT (as EU "exempt" (the UK Limited Co's UK VAT number has been given). The invoices are made up of two elements, firstly a monthly fixed charge for signing up to the services and secondly a commission charge which varies depending on the number of products sold by the company via the website.
My question is, given that the sale of the products is considered to be outside the scope of UK VAT, does that mean that the commission charge for these sales is considered outside the scope as well, or should the commissions be declared on the UK VAT return using the reverse charge procedure? How should the fixed monthly charge be reflected?
Many thanks in advance.
The websites that are used to market the products are administered from Luxembourg and invoices for the services are received by my client without any VAT (as EU "exempt" (the UK Limited Co's UK VAT number has been given). The invoices are made up of two elements, firstly a monthly fixed charge for signing up to the services and secondly a commission charge which varies depending on the number of products sold by the company via the website.
My question is, given that the sale of the products is considered to be outside the scope of UK VAT, does that mean that the commission charge for these sales is considered outside the scope as well, or should the commissions be declared on the UK VAT return using the reverse charge procedure? How should the fixed monthly charge be reflected?
Many thanks in advance.