VAT on purchase from Poland

[ballista]

We recently purchased goods through ebay from a Polish manufacturer. Goods are great quality and we are very happy. On receiving invoice for the sale we noticed that it appears polish VAT has been charged at 23%. We are a UK VAT registered company and confirmed this with ebay when we registered thus assumed goods would be supplied vat free (eu supply) and that the seller would be aware of our VAT status. I have read that we cannot reclaim this polish VAT and that the seller has incorrectly added this. Is that correct ?

Andy

 

[talkinpeace]

It being ebay your best bet is to get them to refund the money and then then once you have supplied them with your VAT number, they can send you a paypal invoice for the net amount that you put through your books and account for the EU VAT.

Make sure that you mark it as despatched and paid in ebay
and give the seller good feedback once the goods and bill have arrived (including high DSRs ) so that disputes cannot arise later.

Ebay is a retail site so can be a bit of a PITA for B2B sales!

 

[Herandu]

When you buy goods from within the EU, you have to pay the VAT at the rate that is applicable to the country the goods are sent from.
Now, with ebay trade things get a bit trickier. Let me use my own experience and business as an example.

I am registered for flat rate VAT. That means that I hand over to HMRC VAT on any sales I make to any EU country. So anyone flashing their VAT registration number in front of my nose still won't get a VAT exempt sale. And why not you ask. Well, that's because the VAT man doesn't care if I sold the goods without VAT. Under the flat rate VAT rules I am still liable for the VAT. It is quite possible the Polish seller is in the same predicament at his end.

Now coming to eBay. They charge the seller a fee based on the final selling price plus postage. And that is the price that will appear on the Paypal invoice. Any amendments to that amount has to be done by the seller within eBay before it is sent to you for payment. He cannot amend it from within Paypal. Neither can he charge you a different amount in Paypal compared to the final price in eBay. If he tries to circumvent that, the seller could quickly get a note from both eBay and Paypal stating that his days with them are numbered. So you won't find many sellers who are sympathetic to your plight if they are aware of this eBay/ Paypal sword of Damocles.

For VAT free purchases within the EU it is best that you confirm beforehand with the seller that he can do a VAT free sale. If you first buy the goods on eBay and then confront the seller with a VAT registration number afterwards, I don't expect you to get away with not paying the VAT. Sellers would rather refund you the payment.
You can reclaim the difference in the VAT if the goods are sold on with VAT added. But if the purchase was not for resale purposes then you'll have to take a hit on the Polish rate of VAT.

 

[talkinpeace]

Herandu - there is however NOTHING to stop an ebay seller adding in an agreed postage discount to the value of the VAT - and as the Ebay FVF and listing fee would be unaffected and Paypoo are technically a separate business their TRS status would not be hit by doing that.

OP
THis one might be best over on the Ebay International or business boards ....
http://community.ebay.co.uk/category/Selling-Ebay/1900000091

 

[internetspaceships]

Sorry Herandu but I don't agree.

He should be simply able to provide his GB VAT number and get the VAT refunded through paypal or whichever means he paid the seller.

Where are you getting all this rubbish about resale from? If he's VAT registered then Poland is in the EU reciprocal VAT agreement.

 

[Herandu]

As I pointed out, you can make adjustments to the final bill sent to the customer, but you have to do it from within eBay. That includes postage discount, as you correctly pointed out. The final seller's fee calculated by eBay is based on the amount on the invoice posted from eBay to Paypal when you are ready to pay.
Whilst they are technically two different companies, the feared "Account is Restricted" message when logging into Paypal should be avoided at all cost.

But that still leaves us with how to go about getting a VAT free sales from within the EU via eBay.

 

[internetspaceships]

It's no problem at all. You contact the seller and he sorts it. There's no drama over it.

Yes the buyer should have told them up front. That's his mistake however there really isn't any problem recovering it after the fact.

 

[Herandu]

Where are you getting all this rubbish about resale from? If he's VAT registered then Poland is in the EU reciprocal VAT agreement.

I am a big trader on eBay and have been so for 7 years now,and use Paypal as my main method of payment, including credit card and bank transaction.

Whilst there are reciprocal VAT agreements, a couple of loopholes were closed after dodgy dealers were claiming to sell mobile phones in container quantities to Belgium and wished to claim back the VAT since they had allegedly sold the phones VAT free to a VAT registered business. Many businesses in the EU are not keen to handle VAT free sales for relatively small amounts to other EU countries, no matter what the EU VAT agreements are. I have been trading with other EU businesses since the 90's so I am quite aware of this from experience.

 

[talkinpeace]

internet
in the real world yes
but the transaction took place in the alternative reality that is ebay
and seller restrictions are a HUGE headache so the logical approach will not be the available one

 

[internetspaceships]

A big trader working on the flat rate scheme?

Come on....

I've been tradng since the 90's as well, and I can assure you that you are overcomplicating this.

 

[internetspaceships]

internet
in the real world yes
but the transaction took place in the alternative reality that is ebay
and seller restrictions are a HUGE headache so the logical approach will not be the available one

Noes! We have done it plenty of times. Honestly Peace. It's never a problem.

 

[talkinpeace]

since the new DSR and seller account rules came in in January?

Even James the Pink admits they are causing headaches.

 

[internetspaceships]

Yes, one only 10 days ago.

If you're registered on ebay as a business they have these details already so really there should be no confusion.

 

[talkinpeace]

so you are getting people to amend the invoice to drop their FVF and they are not getting hammered by ebay?
Could you post details of that on either seller central or the powerseller board as it would be useful for people to know.

 

[internetspaceships]

I really don't know if they are dropping their FVF or not. Why should it matter to me when I get my VAT back?

There's really no need for the business to concern itself with that side and it's honestly not relevant to this guy getting his VAT back.

I have heard, and I might be incorrect, that if the seller clearly stated that a valid VAT number MUST be disclosed by the buyer before payment is sorted out then it's possible that the seller could say no and get the buyer to reclaim the VAT from his own VAT return.

 

[talkinpeace]

sorry but that is bilge
it is NEVER permitted to include Polish VAT (or any other EU country) on a UK VAT return.
or vice versa

 

[internetspaceships]

You're right and I've just slapped the person in the room who suggested it. (Hence why I said I might be incorrect in the first place.)

*slap slap* who now claims they misunderstood what I was asking. Sorry!