Tax Exempt Supplier and cross border supply

How to deal with VAT from Tax Exempt Supplier from project 90% funded by grant

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Hello All,

Situation is as follows:

A university in France will be conducting a study on behalf of an entity in Germany. The Universities tax exempt status comes from the fact that it is providing research and higher education and one of the criteria for selling these services with an exmpt status is that the project is being funded from an entity that does not have to pay VAT itself. If the European Commission would be funding the project directly this would be the case, however, the project is 90% funded by the EC and 10% by the Germany entity itself. How should the Germany entity deal with this from a tax perspective given that they are funding 10% of it and does the Reverse Charge mechanism come into play here?

Thanks in advance for any help!

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By WhichTyler
28th Nov 2018 12:31

0. It's complicated, and will depend on the precise terms of the contract between the partie
1. The German entity should take local advice for a project of this complexity.

2. This may give you a clue, but do see above...

https://www2.le.ac.uk/offices/finance/information-for-staff/financial-op...

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