Do I charge VAT to an American company with an EU office that is not VAT registered?

Do I charge VAT to an American company with an...

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I run a recruitment consulting company. I have been working for a US incorporated company that is VAT registered in the States. I have undertaken work for their German office and sourced a candidate to work in Germany, of which I charge a fee. Their German office is not VAT registered and I am expected to send an invoice to their German office.

Bearing in mind they are an American company that is VAT registered in the States, how do I handle VAT in this instance.

From my analysis, I am presuming as the service was supplied within the EU, then EU VAT is due. If they were registered for VAT in Germany, then I would send a zero rated invoice stating our vat number and their VAT (MwST) number on the invoice, and they would be responsible for paying German VAT / MwST at the appropriate rate for that region. But as their German office nor US company is registered for VAT in Germany, I have to send an invoice with 20% UK VAT charged. Am I correct?

Thanks in advance for help and advice. So confused.

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By Richard Willis
20th Mar 2014 11:21

My opinion is

that you are correct.  The only way you can either zero rate or reverse charge an invoice is if the client supplies you with their VAT number.  As they obviously can't I would say that VAT is chargeable.  If they try asking you to invoice the USA the service was still provided within the EU so that's a 'no'.

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