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EU Directive for conditions for zero-rating for in

Anyone know the EU VAT legislation reference for zero-rating service for a client in "business"

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For VAT purposes, if a client is in another EU state, you zero-rate the services if they are in business and this is usually proven by looking at the VAT registration. However, if the client is below the VAT threshold or are not VAT registered for some other reason, HMRC says:

 “If a customer claims to be in business but not to be VAT registered then alternative evidence should be obtained. This can be in the form of other reasonable commercial evidence or records that should normally be available, for example, contracts, business letterheads, a commercial website address, publicity material, certificates from fiscal authorities, and so on. A digital certificate from a reputable organization can also be used for this purpose.” [ https://www.gov.uk/hmrc-internal-manuals/vat-place-of-supply-services/va...

Does anyone know the EU VAT directive/legislation reference that deals with this? A client in France is not comfortable zero-rating the service for a business customer based in UK (who is not registered and is below the UK VAT threshold). They have asked for legislation references.

Please help!

Replies (6)

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By paul.benny
20th Nov 2019 16:52

VAT741a contains references to the relevant UK legislation and EU Council Directives.

I'm not entirely convinced that your client is entitled to have his services zero-rated. It may depend on the exact nature of those services.

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Psycho
By Wilson Philips
20th Nov 2019 17:07

An academic point, perhaps, but reverse charge sevices are not zero-rated - they are outside the scope (from the supplier's point of view).

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By The Dullard
20th Nov 2019 17:15

If it's a general rule service, it isn't zero-rated. It's outside the scope of French VAT, by virtue of the place of supply rule in article 44 of the recast 6th directive (EC 2006/112). You'll also need to refer to article 9, which defines taxable person (because it's got a different meaning in the 6th directive to the one in VATA 1994).

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Caroline
By accountantccole
21st Nov 2019 08:17

Point them to this:
https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/wh...
which says this (4 para down under services)
La notion d'assujetti couvre toute personne qui exerce d'une façon indépendante une activité économique, même si elle n'est pas identifiée à la TVA, mais inclut également toute personne morale non assujettie qui est identifiée à la TVA [article 43 de la directive TVA].
The broad summary of the rules on the main French gov site is much less detailed and it is probably why they argue this point so often

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Replying to accountantccole:
Psycho
By Wilson Philips
21st Nov 2019 09:18

accountantccole wrote:

The broad summary of the rules on the main French gov site is much less detailed and it is probably why they argue this point so often


Or perhaps it is simply because they are French ...
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Replying to Wilson Philips:
Caroline
By accountantccole
21st Nov 2019 10:48

If there is an a rule, as accountants they follow it. Can't believe the physical paperwork still used here. I've had at least 7 copies of one invoice from Vistaprint.fr, everyone gives you an invoice for everything!

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