UK and USA cross Country VAT law

Can UK company charge VAT to USA Company for Services rendered(IT Contract) in Europe including UK?

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Hello all,

We are UK based Recruitment Agency about to sign the Emplyment Contract with US based Company to place IT contractors across Europe including UK, the contract clearly stipultes that it is based on US Laws. The Contractors while in UK will charge us VAT while invoicing us(Purchase Invoice) but can we charge VAT on our Sales Invoice to our Counter part in USA?

Will appreciate you expertise on this.



Replies (2)

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By Matrix
26th Oct 2018 12:54

Before you sign the contract I would recommend getting accounting advice based on the bespoke facts.

Generally a business providing services to the US would not charge VAT but would be able to register to reclaim VAT suffered. However given the nature of the services you are providing and the fact that you have called the contract an employment contract there could be PAYE obligations or you could be an intermediary. The contractor market is a very uncertain market presently. I assume you have already addressed these issues.

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By kiwilondon99
26th Oct 2018 16:55

If you are tobe 'paid' cash transferred - by the USA based company be aware of any deductions for taxes / withhold taxes etc. Also ensure contract states any international bank charges are not to your account [ they can be considerable !] and full invoice is received no deductions. Out of interest are you billing in $, receiving $ - do you have a $ bank account - but paying contractors in £ [ you'll run considerable currency exposure] W8Ben completion absolutely required but do seek professional accountants advice required for this

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