We have a component supplier in Austria (VAT registered in Austria).
We have another supplier in Germany (VAT registered in Germany) who uses the Austrian component to make the finished product.
I would like the Austrian company to bill us in the UK but send the component directly from Austria to Germany.
The Austrian company (and their accountant) are saying that they are unable to bill a UK company and ship the goods to Germany a) as a consequence of Brexit, and b) this is an intra-community shipment.
We've had silly billing issues with this supplier in the past where their accountant didn't have a good grasp of intra-community sales where we bought their goods through a Belgian company. We had to explain some very simple concepts to them.
Regardless of Brexit, this seems a very straightforward instance of drop shipment where the Austrians bill the UK company and ship the goods across the border to Germany with zero-rated VAT. The accountant for the Belgian company seems to think it is.
Are we wrong in thinking that this is not a mind/law-bending situation as the Austrians seem to think? Yes, there could be some quirk in the Austrian tax regime, but I can't imagine that that would be the case for something that seems so basic.
Even then, I'm not sure how to explain the obvious to the Austrians. Or, perhaps I'm the one that needs to be mansplained?
Now, I recognise that an alternative "solution" is for the German supplier to be billed by the Austrians, and for the Germans to bill us in turn. However, the Germans cannot flip it at zero margin, so they need to bill us a 10% surcharge, which I understand but doesn't make economic sense to us.
Any thoughts would be much appreciated.