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Does Company need to register for VAT ?

UK company but place of supply of service is Saudi

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UK Company not yet trading. Offered a contract for services to be carried out in Saudi.  Am I correct in saying the place of supply will be Saudi and therfore VAT registration in UK is not required?

Also has anyone any advise re the company being paid direct into a Saudi bank account, this money being transferred monthly to UK bank account, processed as Turnover through UK company and UK corporation tax paid accordingly???  

Any help appreciated 

Replies (8)

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By David Ex
23rd May 2022 16:21

Best advice would be to take some professional advice. It’s an unusual set of circumstances so worth getting it right.

Thanks (1)
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By Leywood
23rd May 2022 16:54

+1.

What has your research thrown up so far? Where have you looked? Anywhere?

Lacking info. What 'services'?
B2B or B2C?

Advice, not advise.

Not sure why would you think that money paying in to the UK account would represent turnover? Surely you are not using the cash basis for a company?

Why would UK CT not be payable?

Is there a(nother) typo in the original post?

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By Tax Dragon
23rd May 2022 17:16

You're going to let (assumption alert begins) your client (alert ends) pay UK tax on top of Saudi withholding tax?

Out of interest, what is your experience of dealing with trans-border tax issues? Do you think you are sufficiently qualified to deal correctly with this case?

(Also just checking... does "UK Company" mean "UK tax resident company"?)

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By WhichTyler
23rd May 2022 18:33

Will they be setting up a permanent establishment in Saudi (even unintentionally)?

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My photo
By Matrix
23rd May 2022 19:55

Get Saudi advice. Mark it as high risk. Better still say No and refer to a bigger firm.

Why do so many Awebbers take on work that they don’t have the knowledge to do? Not getting at OP as we are all allowed to post but there is plenty of low risk work out there.

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VAT
By Jason Croke
23rd May 2022 20:11

What services are we talking about? If it is land related (architect, etc) then might be a problem.

Also, are these services to consumers or businesses or both?

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By DKB-Sheffield
23rd May 2022 20:18

Personally... wouldn't touch it with a barge pole (or two). But then, I have no idea about Saudi tax, Saudi laws, or even whether what you are proposing (which is what btw?) is possible. Besides, my PII doesn't stretch to it - does yours?

You've already stated... the company is not yet trading... perfect time to step away and pass it on?!

Your question, with a little more info, may prove an excellent discussion topic. As for a topic that can (or should) be 'advised on' in a public forum... "nah".

Incidentally, and FWIW, I don't think VAT, or the location of the bank accounts, are going to be your main concerns here! WhichTyler's point regarding a PE could - in fact - be a game changer!

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chips_at_mattersey
By Les Howard
24th May 2022 10:33

One option is to register for UK VAT under Sch 1, para 10 and recovery UK input tax; perhaps Annual Accounting lined up with the company's financial accounting period. Make VAT work for you!

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