What does this mean on a VAT invoice?

What does this mean on a VAT invoice?

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We've received a VAT invoice from a company based in Luxembourg for £20.87. This is from surveymonkey so is for a supply of services. On the invoice it states:

"Not subject to VAT, according to article 44 of the Directive 2006/112/EC"

I tried looking this up but to be honest I don't really understand it. Is it telling me I don't need to account for VAT at all, or is this some sort of reverse charge?

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By DMGbus
28th Mar 2013 16:43

Cross border services B2B (maybe)

At a guess this means that both supplier and customer are VAT registered businesses within different countries in the EC.

Then, supplier will typically NOT charge VAT to customer (depending upon nature of services and where performed) and will include an appropriate statement to this effect on the invoices plus customers VAT number preceded by a country code (eg. GB).

Customer then self-accounts for VAT on the services received (declares an output tax and, if eligible to recover, recovers identical input tax value).

Here's 118 pages of gobbledegoop on this nonesense...

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:0118:en:PDF

see also VAT notice 741A.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_PROD1_029955&propertyType=document

As seems to be so often the case in these circumstances there's no mention of "article 44" in VAT notice 741A - this is a good example why VAT notice 741A is 96 pages of garbage.

 

 

 

 

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By Cardigan
07th Jun 2012 20:45

Confirming B2B transaction?

It looks like it is confirming that it is a B2B transaction (rather than B2C) and that the reverse charge applies.

http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs06200.htm

I read something in the last week about EU-bods working on a standard narrative for invoices where a reverse charge applies. We can expect a 1,000 page document detailing more gobbledegook which no one understands.

 

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