UK Company Leasing/Hiring Copier in Greece - VAT

VAT Position on Transactions in Greece

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A UK Company, with UK resident directors, etc and no presence overseas, has bought a copier from a Greek supplier and is leasng/renting it to a Greek customer.  Answers on a postcard please re the VAT position?

My guess is that the company probably has to register for VAT in Greece and can then recover the Greek VAT, but has to charge VAT on rentals - but VAT is all Greek to me! 

Replies (9)

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By paul.benny
22nd Apr 2024 17:07

I support your guess. Google tells me the registration threshold is nil although there may be nuances to that.

Why do people do crazy things like this?

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Replying to paul.benny:
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By BryanS1958
22nd Apr 2024 17:32

I'm guessing they are thinking of revenue, rather than VAT:-)

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VAT
By Jason Croke
22nd Apr 2024 17:13

What is your client doing currently re. VAT on the lease/rental, are they charging UK VAT to the Greek customer or are not charging VAT under the auspices of reverse charge?

Presumably the Greek supplier who sold the copier charged Greek VAT which your client can't reclaim currently?

Is the Greek customer registered for Greek VAT?

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Replying to Jason Croke:
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By BryanS1958
22nd Apr 2024 17:38

Yes, the supplier charged Greek VAT, which is currently irrecoverable.

I imagine my client will not want to register for VAT in Greece, because it is most likely a one off deal, even though the threshold may well be zero.

They wouldn't know, or understand, what a reverse charge is, so not something that is likely to be on their radar!

I imagine that the Greek customer is either VAT registered, or in business, but do not currently know for sure.

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By Bobbo
22nd Apr 2024 17:58

Presumably it didn't, but, for the avoidance of any doubt, did the copier leave Greece at any point?

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Replying to Bobbo:
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By BryanS1958
22nd Apr 2024 18:29

No, straight from supplier to end customer.

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Replying to BryanS1958:
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By FactChecker
22nd Apr 2024 22:54

... but via "A UK Company, with UK resident directors, etc and no presence overseas" - what were they thinking or hoping to achieve?
[Especially in a country where defaulting is not an uncommon hazard.]

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VAT
By Jason Croke
23rd Apr 2024 08:36

Place of supply of services default rule is overridden by the use and enjoyment rules as per section 13 of Notice 741A, and suggests hired goods are enjoyed where they are used (Greece) and as the supplier is a UK entity, it is not Greek resident, therefore VAT registration threshold is Nil, triggering a VAT registration in Greece.

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#...

Your client should seek some Greek advice, it may be that if the Greek customer is VAT registered and that it performs a reverse charge correctly then there may not be a requirement for your client to register for VAT, but the starting point is the Greek customer is potentially benefitting from hiring from a foreign supplier as it is potentially avoiding incurring VAT (hence my other query about the lease charge, which you didn't answer) but am assuming UK client isn't charging VAT which it would have done if it had hired the copier from a local Greek supplier.

Whether anyone in the Greek tax office would notice is a different discussion topic, I doubt even HMRC would spot a similar transaction if it involved a Greek supplier and a UK customer, but a low risk of being caught as a result of tax authority malaise is not really "proper advice".

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Replying to Jason Croke:
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By BryanS1958
23rd Apr 2024 09:43

Thanks Jason. If you have a preferred charity I'll make a donation for your assistance.

I suspect the client would have either charged UK VAT or no VAT, but I don't know.

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