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VAT registration abroad requirements B2B?

Do we have to register for VAT in other countries if the supply of services is over their VAT limits

Didn't find your answer?

Can anyone point me in the right direction please, we are expanding and supplying world wide software development B2B.

I understand the U.K. rules are that B2B supply of services means the supply is where the customer is based therefore no U.K. VAT. What I need help understanding is if this then means I need to keep an eye on the VAT limits in each country we supply software to, and register for VAT in that country?

 

thanks in advance for your help.

Replies (9)

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By David Ex
26th Jan 2022 10:37

You joined today and have asked a question asked multiple times on here over the last year or so. (Quite often by software businesses, as it happens, who seem to think their product is valuable but tax advice isn’t.)

You are advised to search the site before posting questions so try that.

Having said that, if you are expanding internationally without a professional advisor, you’re likely storing up problems for yourself anyway.

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Replying to David Ex:
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By Welsh Joey
26th Jan 2022 10:44

Thank you for your unhelpful response. I have used the search function before typing this message out and nothing came up. Have you ever heard the term if you have nothing helpful to say don't say anything at all, keyboard warrior.

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Replying to Welsh Joey:
paddle steamer
By DJKL
26th Jan 2022 11:00

Not very well- I would start with this series of articles.

https://www.accountingweb.co.uk/hub/brace-for-brexit

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Replying to DJKL:
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By Welsh Joey
26th Jan 2022 11:36

Thank you, yes this was were I started looking but I couldn't find anything specific about the rest of the world. When it comes to EU countries google seems to have lots of information and as a qualified account myself I know lots about UK VAT and EU VAT but not for the rest of the world (other than the UK treatment).

In Accounting web I have search the questions for
"Supply of services rest of World"
"VAT Supply of services business to business"
"Registering for VAT abroad"
"VAT registration abroad"
"international VAT"
"software companies"

All of which have not brought up the information I require. I have also asked our accountant for help and she has given me an answer but is not certain and suggested I use here as a forum. I would also be more than willing to engage with a international VAT specialist and this is part of the reason for posting here to see who was able to answer my question, but it appears here might not be the most friendly forum I had hoped for.

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Replying to Welsh Joey:
paddle steamer
By DJKL
26th Jan 2022 11:53

I suspect you will need to check the rules for each individual country, one by one, or employ an accountant in each country to advise. I suspect precisely how you operate, your presence in each country etc, may make a difference.

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Replying to Welsh Joey:
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By Hugo Fair
26th Jan 2022 13:11

There are a number of VAT experts on this forum ... so I'd keep your toys in the pram for now, if I were you, and wait to see whether any of them wish to help (whether with free pointers or as a paid-for engagement).
I'm sure you realise that the question you're raising (and all the others likely to flow from it) are not going to generate a simple Yes/No type of response ... so hold your horses and see what transpires in time.

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Replying to Hugo Fair:
VAT
By Jason Croke
26th Jan 2022 14:21

Hugo Fair wrote:

There are a number of VAT experts on this forum ... so I'd keep your toys in the pram for now, if I were you, and wait to see whether any of them wish to help (whether with free pointers or as a paid-for engagement).
I'm sure you realise that the question you're raising (and all the others likely to flow from it) are not going to generate a simple Yes/No type of response ... so hold your horses and see what transpires in time.


Well, indeed. The question is basically saying "what are the VAT registration requirements and rules in the 100+ Countries outside of the EU that operate a form of VAT."

Suspect withholding tax may be the bigger problem.

From a VAT perspective, default place of supply of services is where the (B2B) customer is, so outside the scope of UK VAT and customer accounts for VAT at their end. As the place of supply of services has been determined to be where the customer is/where customer accounts for VAT, then there is no requirement to register for VAT in those EU member states....Assuming these are digital services or some form of consultancy and you're satisfied fall under the default rules.

As the majority of VAT systems globally operate on similar concepts to the established EU system, then one would expect a similar outcome globally, however, each Country outside of the EU is free to set its own rules.

EY do a useful global VAT guide, just Google "Global VAT guide" and it'll be there, link here, you can then read through the extensive document Country by Country https://www.ey.com/en_gl/tax-guides/worldwide-vat-gst-and-sales-tax-guide

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Replying to Jason Croke:
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By Welsh Joey
26th Jan 2022 15:07

Thank you this is really helpful.

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Replying to Welsh Joey:
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By Wanderer
26th Jan 2022 11:02

Welsh Joey wrote:

Thank you for your unhelpful response. I have used the search function before typing this message out and nothing came up. Have you ever heard the term if you have nothing helpful to say don't say anything at all, keyboard warrior.

I've occasionally pondered, does overtly calling someone else a keyboard warrior actually make that person a keyboard warrior themself?
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