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UK company supplies service other UK company in EU

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Dear professionals,

I have a questions regarding the VAT and EU.

UK based company (UK VAT registered) is going to order the consultancy services from other UK based company (UK VAT registered) .  The consultancy services will be based in EU, they would like to apply for some licence in EU and they need help with that. So the supply services will be in EU, but both companies are UK based.  Does the sales invoice supposed to be with 0% VAT or 20% VAT?  Thank you!

 

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A Putey FACA
By Arthur Putey
11th Oct 2021 17:23

Does the UK based customer have a business establishment in the EU country where the services will be provided?

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Replying to Arthur Putey:
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By VickyBri
11th Oct 2021 17:39

Oh good question! No, they don't have any business establishment in the EU country and they don't plan.
Probably they will hire some freelancers in this country, who will help them to prepare some documents related this EU country for their UK customer.
But receiver of this services will be UK based company. And the supplier will be the UK based company...:)

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Jason Croke
By Jason Croke
11th Oct 2021 17:55

Default rule, place of supply of services is where the customer is based. So a UK customer (you/your client) buying services from a UK supplier would be UK VATable at standard rate. The UK supplier may seek an EU based supplier to supply them but that is between them and the EU supplier.

If it is not land related, then the default rule remains where the customer is based, so if the UK supplier sub contracts with an EU supplier, the EU supplier would reverse charge/outside scope their supply to the UK supplier and the UK supplier would reverse charge this purchase on their UK VAT return and then make a standard rated onward supply to your client/the UK customer.

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Replying to Jason Croke:
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By VickyBri
12th Oct 2021 06:37

Thank you very much! It's very clear!

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