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Registering for EU VAT and returns in Sage

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Good morning all,

The company I work for may have to register for EU VAT because we are selling to non-VAT registered people/businesses within the EU and I have a few questions thereon, after searching the VAT minefield online!:

1. If we register for EU VAT do we need to have an office presence too?

2. Once registered for VAT I have assumed that entries for sales overseas within Sage as follows:

a) We would add a tax code within Sage for EU VAT so that any invoices raised would calculate the VAT correctly (depending on which country we sell into)

b) I assume that the net values of sales would appear in box 6 of the return. (They wouldn't appear in box 8 as they are not classed as dispatches to EU VAT registered businesses)

c) We would have to do an adjustment when we run our UK VAT return via the "make adjustments" section in the VAT return module. This adjustment would remove the EU VAT from EU sales in box 1. A control account could be setup for each country we file a return in.

Thanks in advance

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Caroline
By accountantccole
22nd Nov 2019 13:21

What are your supplies? Goods/services? Makes a big difference in how /where you need to declare.
I'd run this past your accountant, you don't want to get this wrong.
Once you have concluded what the supply is there will be a T code in SAGE 50 already set up to use

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By JonnyB1984365
22nd Nov 2019 14:58

Thanks for your input. It could be a combination of the two to be honest.

As the companies aren't VAT registered my understanding was that the reverse charge cannot be used for services as no VAT number can be provided. From the EC tax-site: The supply of services between businesses (B2B services) is in principle taxed at the customer's place of establishment.

As for goods, as a VAT number cannot be given, I understood that UK VAT is charged, until the distance sales threshold is met, then EU VAT registration is required.

As for the T code in Sage. Do you know which code this is please? Does my suggestion of how to account for the EU VAT in Sage sound correct?

Thanks

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By paul.benny
22nd Nov 2019 15:09

There's no such thing as 'EU VAT'. You have to register in each member state where you are liable. And account separately to each tax authority.

You don't need an office or any other presence to register - in fact it's the other way round and having an office may require you to register. Holding stock in a country almost certainly means you have to register there.

VAT725 is a good place to start.

Be aware too, that VAT registration can be relatively slow in some member states. Documentation requirements can also be greater - for example, I've had to provide notarised copies of directors' passports.

As accountantccole suggests, you should get advice from someone who actually knows what they're doing.

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Replying to paul.benny:
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By JonnyB1984365
22nd Nov 2019 15:15

I know EU VAT doesn't exist. I was generalising to make things simple! :)

Thanks for the extra info.

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