UK business supplying in Germany for Irish customr

UK VAT regisered businesses is supplying land based services in Germany to Irish customer. VAT?

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UK VAT registered business is supplying land based services in Germany for a business customer in Ireland. How is this dealt with for VAT. I've read VAT Notice 741A and have established that the special B2B land rule applies therefore the supply is in Germany. The supply is therefore outside the scope of UK VAT and no UK VAT charged. The supply should be recorded in box 6 of the UK business' VAT return and the ECSL. The Notice details how the reverse chrage procedure works: but only for a non-UK business making supplies in the UK - not the reverse. Section 5.17 says the UK business will need to indicate on the invoice that the service is subject to the reverse charge. This suggests the UK business does not need to register for VAT in Germany but I cannot find anything confirming this. GOV.UK and VAT NAL say they only apply to the UK. I've looked at http://www.bundesfinanzministerium.de/Web/EN/Issues/Taxation/VAT/vat.html but cannot find anything either. Please can anyone confirm the position.

The UK business has incurred German VAT as part of their supply in Germany (mainly building materials). If the UK business does not have to register in Germany I assume the German VAT can be recovered through an 8th directive claim. 

Any help is gratefully received.

Replies (9)

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By Ruddles
20th Mar 2018 16:08

Subject to any peculiarities of German VAT legislation my understanding is this:

Supply is outside the scope of UK VAT.

Supply is made in Germany.

Is the Irish customer registered in Germany? If not, then - subject to registration limits - UK company will need to register in Germany.

We had a similar issue with a UK client making land-related supplies in France to a UK company (not registered in France).

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Replying to Ruddles:
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By kevinringer
20th Mar 2018 16:12

Thanks Ruddles. Why is it relevant whether the Irish customer is registered in Germany? Wouldn't the supply be B2B even if the Irish customer was not registered in Germany?

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Replying to kevinringer:
By Ruddles
20th Mar 2018 16:28

It would be a B2B supply, made in Germany, so Germany is where the VAT will be payable. If the Irish customer is not registered in Germany, then they cannot apply the reverse charge, so UK company will need to register in Germany and account for the VAT. If the Irish customer is registered in Germany then it can apply the revere charge.

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By kevinringer
20th Mar 2018 16:40

Thanks Ruddles

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By WhichTyler
20th Mar 2018 17:22

Can you apply reverse charge German vat without the supplier being registered in Germany?

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By Ruddles
20th Mar 2018 17:47

What do you mean?

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By WhichTyler
20th Mar 2018 18:14

Good question. Not sure. Off to bed

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By richardb84
21st Mar 2018 12:08

If the supply is indeed related to immoveable property, the place of supply is Germany.

As a UK business, there is a zero threshold for VAT registration in Germany and so theoretically a German VAT registration is required immediately.

However, Germany operates the reverse charge in an unusual way in that where a supply of services is made by a non-established supplier to a non-German established & non-German VAT registered business, it is often the responsibility of the customer to VAT register in Germany and account for German VAT.

Of course the above is very much dependent on the specifics of the transaction.

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By kevinringer
22nd Mar 2018 13:27

Thanks richardb84

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