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German VAT Demand on Sales already paid in UK

German VAT dept has demanded VAT for all sales since 2014. This VAT has already been paid in UK.

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One of my client is selling goods in UK and around European Countries since 2014. The sales are made through UK VAT registered company. All the VAT due on European sales made to non vat registered clients has been duly accounted for and paid to HMRC. However, due to changes in regulation in Germany they asked my client to register for VAT as they were selling goods above certain threshold. This was done in October 2019. But now they received email from German tax authorities that they are liable for VAT since 2014.

Can some one please help to clarify if this can be true and if yes how to make adjustments on UK VAT return for the VAT alreay paid?

Kind regards


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By Matrix
21st May 2020 15:41

Have you looked at the distance selling rules?

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By Les Howard
21st May 2020 15:54

Assuming your Client breached the Distance Selling Threshold for Germany, he is liable for VAT in Germany, but those same supplies were not liable to UK VAT.
You should adjust the output tax. You can only do this for the past four years in the UK, using form VAT 652.
For any Return periods more than 4 years old, where you end up paying VAT twice, you can ask HMRC to refund it on a concessionary basis.
And, check sales to other EU Member States, in case you are storing up more of these!

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