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VAT on exhibition services in EU

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Client is UK VAT registered company that designs and builds (using sub-contractors) exhibition stands.

They are quoting for their first exhibition in the EU since Brexit. They will be invoicing an EU company (possibly Belgian). The stand will be built in Germany by Polish sub-contractor company who will invoice their costs (materials and labour) to the UK company. Will Polish VAT be charged on the invoice to UK company? Should UK company charge VAT on invoice to customer?

Thoughts crossing my mind are possible land based services, where services are performed (design in UK, build in EU) but I may be trying to over complicate the matter! Any advice will be much appreciated.

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VAT
By Jason Croke
20th Jan 2022 09:28

In theory, exhibition stands are moveable property and therefore not land related. The UK supplier is making a supply of services that falls under the default rules for services, place of supply is where the customer is (Germany) and the German customer accounts for VAT, for the UK supplier it is outside the scope of VAT.

I say in theory, because each EU member state does interpret things slightly differently and the suppliers themselves will have their own interpretation too. So I would say you need to ask your Polish suppliers what their VAT status will be as part of their quote to you, your margins will be shot if the Polish contractors suddenly hit you with Polish VAT.

Worse case is you should be able to reclaim the Polish VAT back via a 13th Directive refund claim directly via the Polish VATman, you may need to use a specialist EU VAT refund specialist and pay 25% or so commission to them and let them have the hassle of dealing with the Polish taxman and factor the cost of recovering that VAT into your profit calculations .

The EU legislation on exhibition stands and services indicates they are not land related supplies, but as above, often the basic law is interpreted differently with different eyes.

Click link and go to Page 51, para 2.4.20
https://ec.europa.eu/taxation_customs/system/files/2016-09/explanatory_n...

Also note, often the price for the exhibition stand sometimes sees ownership pass to the customer (ie, UK designs stands, ships to Germany and then after event the customer keeps the stand), be careful here as the sale of goods (the stand) may be seen to take place in Germany and that would trigger the UK to have a German VAT registration (ie, non-established supplier selling goods that are located in Germany at time of sale).

One final thing, when shipping the goods from UK to Germany, make sure your paperwork indicates the goods are temporarily imported into Germany (ie, use the right temporary import relief codes)....unless you are using a specialist freight agent who would of course do all that for you.

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Replying to Jason Croke:
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By NicolaJW
24th Jan 2022 21:35

Thank you!

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