Help with an invoice quoting a German tax rate

[SaraAPS]

I have received an invoice from a UK based company quoting a German VAT reg no and German tax rate of 19% and I have no idea how to go about accounting for this in Xero. I tried contacting the company who advised that as their event is physically being held in Germany it is subject to German VAT and they have to account to the German authorities.

Can anyone please advise me how to deal with this invoice and how to enter it into Xero?

Thank you.

 

[Scalloway]

You will have to enter the gross amount and ignore the German VAT.

 

[SaraAPS]

You will have to enter the gross amount and ignore the German VAT.

Thank you

 

[SaraAPS]

Thank you

Thank you

What tax rate should I use?

 

[Scalloway]

I would use exempt.

 

[SaraAPS]

Thank you very much for your help.

 

[The Byre]

Just to expand slightly on that - in Germany, all companies are VAT (MwSt) registered, so if you are not VAT registered, they have to treat it as a B2C transaction.

 

[twobic]

I have received an invoice from a UK based company quoting a German VAT reg no and German tax rate of 19% and I have no idea how to go about accounting for this in Xero. I tried contacting the company who advised that as their event is physically being held in Germany it is subject to German VAT and they have to account to the German authorities.

Can anyone please advise me how to deal with this invoice and how to enter it into Xero?

Thank you.

if they are delivering it to the UK they are not allowed to charge German VAT.

Hope you did not get charged import VAT too

 

[NHAccountant]

if they are delivering it to the UK they are not allowed to charge German VAT.

Hope you did not get charged import VAT too

It's a service in Germany, why would they pay import VAT?

 

[twobic]

It's a service in Germany, why would they pay import VAT?

oops, didn't see the word event. sorry!

 

[NHAccountant]

No probs, part of me was thinking i might be missing something! Even as an accountant, VAT can get complicated!

 

[The Byre]

So I asked our relevant tax guru and she pointed me at this page here -

Willkommen auf der Homepage der IHK Potsdam

Unser Serviceangebot, Events und politisches Engangement für alle Unternehmen, Gründer, Azubis und Ausbildende in Brandenburg von der Prignitz bis zum Fläming.

www.ihk-potsdam.de

The IHK is the German rough equivelent of the Board of Trade, though it is not a government body. The deciding factor is who is the recipient of the service and where are they located.

 

[Ivanovitch]

Just to expand slightly on that - in Germany, all companies are VAT (MwSt) registered, so if you are not VAT registered, they have to treat it as a B2C transaction.

Not quite true, the Kleinunternehmen rule does exist so that you can be under the MwSt threshold, but in practise the threshold is so low that the vast majority (all?) of companies you do business with internationally will be registered.

 

[The Byre]

in practise the threshold is so low that the vast majority (all?) of companies you do business with internationally will be registered.

Now the MwSt threshold is at 22k Euros.