A phone was purchased by a UK company for the use of a UK employee of a connected EU company.
My view on the transaction would be that, In effect, we bought the phone in the UK, reclaimed VAT- and then will be delivering the phone to the UK employee but invoicing to an EU entity that hires this employee- therefore we would charge VAT on the re-charge of the phone to the EU entity (UK delivery). But thent the EU entity will most likely not be able to reclaim VAT via their normal procedure.
Agree/Disagree?
Replies (5)
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Sale by UK entity to EU entity is zero rated export. Evidence of export required to satisfy VAT regulations.
EU recipient probably liable to VAT on entry; recoverable subject to the local rules.
Sounds like there is no intention to export?
If phone remains in the UK surely UK VAT will apply like OP suggests
I'm with Accountantccole, the phone never leaves the UK, so not an export, not a service (and of it was it'd fall under use and enjoyment rules), so charge UK VAT, if the EU business wants to, it can make a reclaim direct to HMRC (similar to 8th Directive refund).