DOES A UK RESIDENT CIS SUBCONTRACTOR HAVE TO REGISTER FOR VAT IN GERMANY?

DOES A UK RESIDENT CIS SUBCONTRACTOR HAVE TO...

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Hi, would anyone know if a CIS Subcontractor has to register for German vat if he exceeds the German vat threshold whilst working there? He is a UK resident and working in Germany on a CIS card. What is the German vat threshold?  How would I go about registering him? Does he also need to register for vat in the UK, and at what point, since he also earns from the Uk? Thank you Jacqui                                                                                                                                                      

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By julian.sims
10th Sep 2013 13:50

Place of Supply

My immediate reaction is that (presuming he is suppying construction services), the place of supply will be where the revelant property/land is located.  Therefore subject to German (not UK) VAT.

As regards the German VAT threshold, if he does not have a 'place of establishment' in Germany, the VAT registration does not apply and any taxable supplies require registration.

I have not thought through whether any ability to use reverse charge provisions is he is VAT Registered in UK.

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Replying to James Green:
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By Jacq_Maud
10th Sep 2013 15:47

Place of supply
Hi Thank you for your comments. He is not currently registered for UK vat, also he does not have a place of establishment in Germany.
When you say 'Any taxable supplies require registration', does that mean there would be no vat threshold applicable and all income would be vatable under German vat?

Many Thanks for your help
Jacqui

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By User deleted
10th Sep 2013 14:10

As John says ...

... place of supply is likely to be Germany, where the land is situated.

If he has a fixed or other business establishment in Germany, associated with the supply, he will need to register in Germany if the threshold - whatever that is - is reached.

If he does not have such an establishment, registration will depend on where the customer belongs - if in Germany (and the customer is a business), reverse charge should apply so no need to register. Otherwise, as John says, registration required regardless of turnover.

The UK VAT position is irrelevant.

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Replying to Ammie:
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By Jacq_Maud
10th Sep 2013 15:53

German Vat
Thank you for your comments.

So, I will check if the customer has a German business establishment. If not, then registration required in Germany regardless of turnover?
Do you know how to go about registering?
Many thanks for your help.

Jacqui

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By julian.sims
10th Sep 2013 16:52

What type of customer

There is a key point to remember, if dealing with business customers in Germany (B2B sales) then they deal with through the reverse charge.

If dealing with consumers (B2C), then correct (and if no permanent establishment in Germany), have to register there for first sale.

If needing to register, would want to use a local agent.  Also could consider the new MOSS scheme where you account for 'local' VAT through HMRC, but the new system comes in from 1/1/15 I think.  This is really designed for on-line retailers and the like, so perhaps not relevant to your case.

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Replying to Limited Company:
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By Jacq_Maud
10th Sep 2013 20:08

What type of customer

Thank you for your comments.  All of which have helped immensely and saved me trawling through the internet.

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