Hi,
Client of mine is making a sale to an individual in Norway - does he have to charge VAT?
Thanks
Matt
Replies (4)
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Probably - No
From the limited information available probably No.
But with VAT information is king.
Is this goods or services?
If services is it relating to land and if so where is the land?
What is the precise nature of the supply?
If these are goods, where are they at the point of sale?
All of these could change the above answer, and may lead to other questions.
But since Norway isn't part of the EU, then any supply of goods sent to Norway will be an export and can be zero rated, assuming the goods are sent out from the UK, and the client retains proof of export.
Proof of export required
Your client should have obtained proof of export in order to zero rate the sale. In the case of items carried in luggage it is usually sufficient to take a copy of the customer's passport and return ticket. If they have nothing they may be required by HMRC to cough up the VAT!
Retail export scheme
If an outside-the-EC customer collects the goods from a UK supplier my view is that the Retail Export Scheme applies.
I've seen this operated with jewellery and furniture retailers in practice as follows:-
Customers pays the full price including VAT to the retailerThe customer takes a certificate to the port of departure where Customs certify that the goods have left the UK.The customer sends the certificate to the UK supplier who then issues a refund of the VAT amount, sometimes less an administration fee.
The problem with keeping a copy of a passport and return ticket is that this is certainly NOT proof of export. The customer could sell the goods before leaving the UK. The customer could be buying the goods VAT-free on behalf of a UK consumer.
For further information refer to:-
Notice 704/1 Tax free shopping: VAT refunds for travellers departing from the European Community
(EC)
September 2004