Selling to Europe and USA

[alexwilliams]

Hey,

Just a quick question on VAT when selling to Europe and USA.

I am in the process of going VAT registered when i am what VAT do i charge to country's in Europe i.e will it be 15% same as UK?

Also i believe if i sell to USA i don't have to charge them VAT but can i still claim back the VAT (input) on the stock i buy, even thought i wont be charging VAT (output)

All items are sent digitally no postage is required.

[accountantpete]

Yes - you charge 15% to non-vat registered customers.

If you are registered then the supplier within the EU can zero rate the supply if certain conditions are met -i'd have a word with the supplier.

[Frauke]

Yes - you charge 15% to non-vat registered customers.

This is only true for EU countries.... Don't forget not every European country is in the EU.

e.g. Neither Switzerland or Norway are EU countries - so customers from these countries would not be charged VAT.

[Nilesh Mandvia]

... but can i still claim back the VAT (input) on the stock i buy, even thought i wont be charging VAT (output)

All items are sent digitally no postage is required.

You need to clarify what are you selling i.e. product or services as both have different rules regarding place of supply. Also rules regarding supply services will be changing from 01/01/2010.

So I recommend to speak to your accountant and decide on this. If you get it wrong you may liable to pay vat, interest and penalty too.

[alexwilliams]

You need to clarify what are you selling i.e. product or services as both have different rules regarding place of supply. Also rules regarding supply services will be changing from 01/01/2010.

So I recommend to speak to your accountant and decide on this. If you get it wrong you may liable to pay vat, interest and penalty too.

It's itunes cards, i scratch and scan them in. The send them digitally to my customers.

Have a wholesaler is USA and Maylasia that want a bulk of them. So i dont have to charge them VAT but can claim VAT back on the stock i bought?

[Nilesh Mandvia]

It's itunes cards, i scratch and scan them in. The send them digitally to my customers.

Have a wholesaler is USA and Maylasia that want a bulk of them. So i dont have to charge them VAT but can claim VAT back on the stock i bought?

First thing first, you can claim vat back on goods or service you are supplying (exporting) are vatable (standard rate) in uk.

Whether you need to charge vat to your customer you need to decide what are you supplying

Goods or
Services

If you supplying goods then you do not need to charge vat subject to conditions are met (such as goods left the country and you have to keep the proof).

If it is services then you need to decide place of supply. There special rules to decide place of supply. Have a read on vat notice 741 .

If place of supply is uk then you have to charge uk vat.

However if place of supply is outside eu (outside members state) then it is outside scope of vat meaning you do not need to charge vat.

Hence I recommended to speak to vat expert or an accountant.

I know this is not the answer you are looking for, but I am afraid you have to make decision based on that vat notice 741 (for outside EU) vat notice 725 for within EU.

[alexwilliams]

Its goods i am selling. Because Apple itunes is the service. I'm just selling cards.

How would i keep proof of digital items? a copy of the email?

[Nilesh Mandvia]

If you think you are supplying goods then you need to read vat notice no 703 . There is information what evedence require to prove the goods left EU.

Nilesh