Storage of Equipment in Germany - German VAT Implications

Storage of Equipment in Germany - VAT

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My company has an order with a German supplier which is normally delivered to the US and therefore has no German VAT implications. However, on this occasion, we plan to take title and store the equipment at the supplier in Germany for unknown amount of time (> 1 year). The final delivery, following storage, will be the US.

As the delivery point is in Germany we have been advised we will be subject to German VAT. Is there any way to exempt this VAT and if not, how would we reclaim this back? My company is registered for VAT in the UK but not Germany.

The order value is in excess of EUR 1M so any VAT liability will be significant.

Thanks.

Replies (6)

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chips_at_mattersey
By Les Howard
21st Jul 2016 14:48

The supply of storage falls into the exception for land-related services, so the Place of Supply is where the warehouse is located. Do ask your German supplier to confirm the relevant part of their VAT legislation for this.
Within the UK, Brief 22/12 confirms this: http://www.articles.scopulus.co.uk/HM%20Revenue%20and%20Customs%20Brief%...

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Euan's picture
By Euan MacLennan
21st Jul 2016 16:37

I am reluctant to step in when an expert has already responded, but I suspect that my almost namesake, the OP, is more concerned with the VAT on the supply of the equipment, rather than its subsequent storage.

It seems to me that as the goods are being held by the supplier and not leaving Germany for over a year, the German supplier must charge German VAT.

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Replying to Euan MacLennan:
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By EwanR
21st Jul 2016 16:53

Les, Euan - Thank you for the responses.

As you have stated Euan, the question related to the supply of the equipment, rather than the storage.

If the German supplier must charge German VAT, is there any steps we can take to reclaim the VAT or minimise exposure?

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By Portia Nina Levin
22nd Jul 2016 10:31

Yes. You can probably register for VAT and Germany as somebody that intends to make a supply that is exempt with the right of recovery. Best take some advice on AccountingWeb.co.de

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By shaun king
25th Jul 2016 12:07

In the first instance it is a land related service so your supplier is correct in charging you MwSt You can reclaim this VAT from the German tax auhority using the UK Portal but beware the Germansd take their time dealing with the claims and will also want to make enquiries if the claim is substantial.

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Replying to shaun king:
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By Portia Nina Levin
25th Jul 2016 12:32

Utter rubbish! As the OP has said they are not talking about the supply of storage; they are talking about the supply of goods.

The German supplier is going to supply the client with goods today, and they will sit in the German supplier's warehouse for a year. The client will then export the goods from Germany in year's time

The question is must the German supplier charge MwSt on the goods? To which the answer is yes. And they must also charge MwSt on any charge made for storage (as you note, but which was not being questioned).

However, they should not be reclaiming the MwSt through the portal, as it all relates to a supply that they will be making in Germany in a year's time, meaning that the client will need to register in Germany with the benefit of advice from somebody who knows what they are talking about.

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