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Italian company vat registered uk how to invoice

Italian company vat registered in uk importing to sell to large supermarket, how to invoice vat

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The company has taken detailed advice from tax advisors and informed that they must raise an invoice from their Italian software with no vat initially to ship goods to the uk to ensure that the sale is on the Italian vat return.  The next step is to raise an invoice with UK vat to the supermarket. The Italian company are acting as importers into UK and then selling to supermarket.

They are under the impression that they invoice their uk vat number which is not a separate entity, to ship goods and declare on their Italian vat return and then invoice again with uk vat.  

I was under the impression that it would be a movement of own goods and then uk vat charged and that these sales are outside the scope of the Italian vat return but I am now unsure.

Can anyone shed some light on this please as I am now interested to know the correct procedure.

 

 

 

 

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By frankfx
22nd Feb 2021 21:53

Ask the well remunerated advisors to provide the advice in plain English and Italian.

At the very least they could have provided you with a series of example invoices and Vat return outcomes.

With a step by step process to ensure the transaction trail is accurate and robust.

That all staff at whatever level understand the procedure.

The fact that you are on this forum should be a sign of failure on their part.
Not yours I hasten to add.

If you were to share this thread with a senior partner or director of the advisors I hope they would be ashamed that you are bewildered.

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Jason Croke
By Jason Croke
23rd Feb 2021 07:52

jo.guest wrote:

I was under the impression that it would be a movement of own goods and then uk vat charged and that these sales are outside the scope of the Italian vat return but I am now unsure.

 


You impression is correct, except for the outside the scope reference. Forget about companies and entities for a second because the concept of selling something you own, to yourself, can confuse.

Italian VAT number zero rates an export to the GB VAT number (transaction 1) so we have a zero rated export on Italian VAT return and import VAT to reclaim on GB VAT return. Then there is a sale from GB VAT number to GB customer (transaction 2) so we have a standard rated sale on GB return.

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Replying to Jason Croke:
RLI
By lionofludesch
23rd Feb 2021 10:42

So, think of each VAT registration being a separate entity ?

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Replying to lionofludesch:
Jason Croke
By Jason Croke
23rd Feb 2021 12:05

Yes, sort of. Obviously there is only one entity, but it is possible to have more than one VAT number per entity (UK, Italy, French, German, etc) and with Brexit, moving goods requires a exporter (seller) and an importer (customer).

So in the OP's case, ItalyCo Italian VAT number as exporter and ItalyCo GB VAT number as importer, that gets the goods from Italy into the UK, ItalyCo still owns the goods, goods are now in UK, so place of supply is UK, ItalyCo charges GB VAT to GB customer.

Hence the idea of treating each VAT registration as a separate "entity", I think it just helps frame the transaction from a VAT perspective. Corporate taxes/profits are all still in ItalyCo, just the VAT input/output accounted for in GB on GB return.

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Replying to Jason Croke:
RLI
By lionofludesch
23rd Feb 2021 13:36

Jason Croke wrote:

Yes, sort of. Obviously there is only one entity, but it is possible to have more than one VAT number per entity (UK, Italy, French, German, etc) and with Brexit, moving goods requires a exporter (seller) and an importer (customer).

So in the OP's case, ItalyCo Italian VAT number as exporter and ItalyCo GB VAT number as importer, that gets the goods from Italy into the UK, ItalyCo still owns the goods, goods are now in UK, so place of supply is UK, ItalyCo charges GB VAT to GB customer.

Hence the idea of treating each VAT registration as a separate "entity", I think it just helps frame the transaction from a VAT perspective. Corporate taxes/profits are all still in ItalyCo, just the VAT input/output accounted for in GB on GB return.

It's a good way to explain it.

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