VAT NIL for UK customer

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My client is not VAT registered in the UK because is small company and my company is VAT registered in Spain but Non-established. The goods are shipped from Spain to the warehouse of my UK customer.

Can apply VAT reverse european Art.194 (or spanish Art.84. 2) for my UK customer although he dont is registered for VAT in his country?

Thank you very much

Replies (8)

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By shaun king
08th Jan 2017 11:37

If the UK customer isn't registered for VAT, the Spanish authorities expect you to treat it as a B2C transaction and charge Spanish VAT.

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Replying to shaun king:
By Ruddles
10th Jan 2017 21:43

Is that correct, Shaun? OP says that he is not established in Spain. For B2C supplies the general rule is that place of supply is where the supplier belongs. Which begs the question - where does the supplier belong in this case? And why is it registered in Spain?

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Replying to Ruddles:
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By shaun king
10th Jan 2017 23:06

If you supply goods in a Member State you don't need to be established there to create a place of supply. The place of supply for goods when supplied to non business customers is the place where the goods are when allocated to the customer which in this case is Spain because the Spanish require a VAT number in order for a business to treat it as a supply for acquisition.

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Replying to shaun king:
By Ruddles
11th Jan 2017 08:21

Thanks, Shaun - I think I was getting confused with place of supply of services.

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By ata_serv
10th Jan 2017 21:29

Thank very much for your opinion, however when you mention "expect yo to treat as b2c transaction", I still have doubts about it

Can anyone else give his opinion?

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Replying to ata_serv:
By Ruddles
11th Jan 2017 08:21

Since I agree with Shaun, my opinion is the same.

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By Portia Nina Levin
11th Jan 2017 10:33

How come Ruddles agrees with Shaun. We do not even know what the question is yet!

It is not at all clear who is who, and whether it is a movement of own goods from Spain to the UK or a supply by a Spanish supplier to an unregistered UK customer, or something else.

If it is the case that there is a Spanish supplier (perhaps with a UK presence) supplying an unregistered UK customer, then I too agree with Shaun with one caveat.

If and when the UK's annual distance selling threshold of £70,000 is breached the Spanish supplier must register for VAT and charge UK VAT.

@OP There is no concept of B2B or B2C for goods. I do not know why Shaun mentioned it. EIther there is a supply to a person who is VAT registered in their own Member State (and can therefore acquisition account for the goods), or there is not.

Acquisition accounting is not the same as the reverse charge, albeit that it operates the same way in practical terms.

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By ata_serv
11th Jan 2017 18:42

My advisor in Spain hasnt yet been able to fully answer this question. He says: "One sale outside Spain for one non-established must be exworks because it is carried outside of the territory of application of the tax, PROVIDED that the recipient is a company"
Spanish law considers a company any subject that performs commercial operations and pays tax in their country but this law dont says that if a company dont is VAT registered should be considered as b2c transaction". He further believes that the UK customer even though he isnt registered in the VAT should account for it as of part of his turnover.

In fact, the custom in Spain is always to indicate the VAT of the customer to make the invoice and my adviser does not yet know if the invoice for the UK company without VAT registered must be made by indicating instead the Company number or Unique Taxpayer number.

NOTE: I have spanish VAT as non-established because most o my suppliers are spanish companies

Thank you very much

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