The Zohan

Just been asked this by someone - why they thought i would know is debatable as i cannot balance a chequebook - anyhow i thought i would turn it over to the the fountain of all thins knowledgeable - SN

UK company selling (web space/advertising)
Swedish company buying

(UK co is VAT Reg)
Uk generated invoice, to Swedish co who doesn't have UK offices. Invoice address in Sweden

Does the UK Co charge VAT, if they do charge it can the Swedish co claim it back?

David Lock

UK company asks Swedish company, (they are in the EC aren't they?) if they are registered for VAT and, if so, for registration number, ideally on letterhead or similar. UK company is supposed to check this with UK VAT people.

If all OK then UK company invoice zero rates supply and records both company VAT number on Invoice.

dl


I am assuming that the goods services that are supplied are normally subject to VAT.

j4ckos mate

spot on just ask them for their vat no and invoice them without vat, get paid first though

Daryl

Assuming the Swedish company is VAT registered, and as the UK company is supplying a service (not goods) in this case, then there is no VAT payable in the UK, but the Swedish company are liable to self-assess 25% VAT in Sweden.

There is no requirement for the UK company to make any checks on the Swedish VAT number supplied to them, they just need to quote it on the invoice.

As to whether or not the Swedish company can recover the VAT, that depends on their VAT position in Sweden:
If they make wholly exempt supplies they won't be able to recover any of it.
If they make wholly taxable supplies they will be able to recover all of it.
If they are partially exempt they will have a negotiated method of calculating the recoverable VAT with the Swedish tax authorities.

If, on the other hand, the Swedish company are not VAT registered, then the UK company must charge VAT.

Hope that all makes sense!