Vat treatment when goods never leave fellow EU cou

VAT treatment when goods go from German supplier to German customer

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Could have sworn i already posted but cannot find it - apologies if double posted.

My client is UK based and registered for VAT in UK. They usually import items from Germany (and other countries) and are not charged Mwst, but reclaim the VAT charged by customs. They then sell worldwide. Obviously when the ship to German customers no VAT is charged if the customer is VAT registered and proof of export is retained.

But what happens if the goods never leave Germany - they are shipped direct by supplier to end customer. German supplier has to invoice UK client, and UK client has to invoice German customer, but how does the VAT work, and if any is payable, is it reclaimable?

Seems extreme for the goods to have to come into UK incurring shipping costs to get the import VAT

Anyone got links to guidance

 

Thanks

 

 

 

 

Replies (3)

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Quack
By Constantly Confused
23rd Feb 2017 16:41

Even though only two countries are involved, I assume triangulation still applies
https://www.gov.uk/government/publications/vat-notice-725-the-single-mar...

So default is the UK intermediary needs to register for German VAT and charge then recover German VAT, but provided the end customer is registered in Germany and the UK intermediary isn't (and doesn't need to be for another reason), the end customer will need to account for the VAT instead.

Thanks (1)
Replying to Constantly Confused:
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By barnsleyfan
23rd Feb 2017 16:51

Thanks
That would make sense
But i rang the VAT helpline and was told that as the goods never left germany, normal Mwst should be charged (which could only be recovered by registering in germany). Since the goods never entered UK, UK VAT did not apply and should not be charged, although German mwst would be chargeable if registered in germany.
Do you know if triangulation would apply when the goods do not leave one EU state since the supplier will have no evidence of export?

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Replying to Constantly Confused:
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By shaun king
23rd Feb 2017 18:07

You can't have triangulation there are not 3 separate entities in 3 separate countries. Here you have a German domestic supply of goods, to I assume a UK company and a German domestic sale of goods to by UK company to German customer.

The end result is the UK Company must register for German VAT.

Also there is no such thing as "Imports" or "Exports" until after Brexit!!

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