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Our French VAT registered supplier is supplying our French VAT registered customer directly with goods but is invoicing us (a VAT registered UK company). Can I ask them not to charge us VAT?

Our French VAT registered supplier is supplying...

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Our French VAT registered supplier is supplying our French VAT registered customer directly with goods but is invoicing us (a VAT registered UK company).   Can I ask them not to charge us VAT even if the goods have not left France?

I assume we can't, so will we be able to reclaim the French VAT?

Thank you

Replies (7)

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By shaun king
23rd Jun 2015 19:47

TVA
The place of supply for the sale of goods by both parties is France. This means that TVA is chargeable by the French supplier but it means the UK company should be registered for TVA.

Thanks (1)
Replying to mkowl:
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By Samantha20
23rd Jun 2015 20:24

Many thanks

shaun king wrote:
The place of supply for the sale of goods by both parties is France. This means that TVA is chargeable by the French supplier but it means the UK company should be registered for TVA.

 

Many thanks, that makes sense, so we should be charging our French customer TVA.    I am now concerned whether we will also need to register for other taxes and if we will be treated as having a branch in France?

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Accountants Northampton
By Shamrock
24th Jun 2015 05:59

Just out of interest
Why have this arrangement, are you an agent taking a commission?

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Replying to the_drookit_dug:
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By Samantha20
24th Jun 2015 20:09

No

Shamrock wrote:
Why have this arrangement, are you an agent taking a commission?

No, we supply IT services and one of our UK customers has a subsidiary in France and the French subsidiary ordered some computer equipment from us.  Our sales director thought it would be easier for a French supplier to ship the equipment to the French subsidiary directly but the French supplier invoiced us and we invoiced the French subsidiary. 

 

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By vatexpert
29th Jun 2015 19:31

Buying & Selling goods in France | VAT rules

Dear Sir, Madam,

As stated by other contributors, the place of supply of goods in your case is France. It is the reason why the French supplier is charging VAT to your UK company. 

There is no way to avoid the payment of this VAT, but you can ask a refund to the French Tax Authorities (FTA) using the EU VAT refund procedure. I invite you to get in touch with a French tax professional who will assist you in this direction.

Even though the place of your own supply of goods is deemed to be in France, your company is not allowed to be registered for VAT in France due to domestic reverse-charge provisions. Your customer being registered for French VAT, if you apply for a VAT enrolment in France, your application will be denied by the FTA.

According to the French tax law, you (as a non French company) are not allowed to charge French VAT to a VAT registered customer in France.

You will find full details on this topic by reading this article: Buying & Selling goods in France | VAT rules

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By Samantha20
29th Jun 2015 19:50

Many thanks for replying to my question.  It looks like we are going to have an identical situation with a Spanish subsidiary of the same customer.  Can I assume that the treatment will be the same in Spain?

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By vatexpert
29th Jun 2015 20:10

Domestic VAT reverse-charge provisions in Spain

Dear Sir, Madam,

Yes, it is the same VAT treatment in Spain.

A post of mine on a similar question is already available on the forum: VAT treatment when purchasing and reselling goods in Spain

Best regards -

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