B2C: VAT on Invoices for EU retail customers

[hibiscus]

Hey,



I run a digital agency in the UAE from a freezone and sometimes I get retail customers from EU buying services/products from me. After many years I stumbled upon a retail weirdo requesting on a rude manner that I need to show 19% VAT listed on my invoices (I don't show any VAT on the invoice, just the final amount). AFAIK I really can't be bothered, I don't have to declare anything because I am a third country not based inside the EU. I don't want to have additional VAT paperwork with every EU country. What can I tell him?

 

[Sols]

hibiscus said:






I run a digital agency in the UAE from a freezone and sometimes I get retail customers from EU buying services/products from me.

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Are the board of directors and employees of the company based in UAE?











hibiscus said:






After many years I stumbled upon a retail weirdo requesting on a rude manner that I need to show 19% VAT listed on my invoices (I don't show any VAT on the invoice, just the final amount).

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19% VAT.



Rude and weird about VAT.



I see you've encountered a particular type of German customer.











hibiscus said:






AFAIK I really can't be bothered, I don't have to declare anything because I am a third country not based inside the EU.

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This isn't necessarily correct. Depending on the nature of your services, they may be subject to VAT when you provide services to EU persons.











hibiscus said:






I don't want to have additional VAT paperwork with every EU country.

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If you are in scope for EU VAT, then you can stay non-compliant (which is very common). It may limit your ability to service some customers, though.











hibiscus said:






What can I tell him?

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If you want to be sure that what you're saying is correct, first speak with an EU/German tax adviser and see if you are in scope or not of EU VAT.



If you aren't, you can tell your customer that.



If you are but intend to remain non-compliant, you need to either lie to/mislead the customer or not answer or render services to him.

 

[W Fish]

Just tell him that you are not VAT liable.

 

[hibiscus]

Sols said:






.

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Yes, all directors are based in the UAE. Haha, yes, that's very GER - yes! How could the message to the customer look like if I just want to leave it as is? Any experience with that?











W Fish said:






Just tell him that you are not VAT liable.

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Based on the fact that this guy is GER, I guess he wants to know the reasons/laws behind it. Any experience on a potential response I can deliver?

 

[daniels27]

What are you selling? You can check here






D





Post in thread 'LLC USA and 2024 VAT Changes in the EU - What to Expect?'



Dec 10, 2023





If you are selling services for which you are doing manual work, you don't need to do anything. If you sell ebooks or automated services like Skype etc. you need to pay VAT through OSS.



https://europa.eu/youreurope/busine...ervices-moss-scheme/index_en.htm#outsidetheeu

• 
  daniels27
  

If you still any sort of digital goods for which you do not do any manual work, your sales are subject to VAT. The customer may be self-employed and wants to get the VAT back on what he paid.



If your sale is not subject to VAT, you tell him so. Otherwise, you may get out offering him a refund if the 19% and telling him they the VAT registration is on the way.

 

[W Fish]

hibiscus said:






Based on the fact that this guy is GER, I guess he wants to know the reasons/laws behind it. Any experience on a potential response I can deliver?

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You being vat liable or not does not depend on where your customer is located.

You can explain that a (small) company in GER might also not be liable until it reaches the revenue treshold from where it is mandatory to register for VAT.



But you might have the obligation to register for VAT in GER if you sell goods located in Ger for GER customers or providing services where the place of supply is Germany, such as certain consulting, event-related services, or services connected to immovable property in Germany.

So it is dependant on the particular service or goods sold.

 

[Sols]

W Fish said:






You being vat liable or not does not depend on where your customer is located.

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It's not quite that simple.



https://europa.eu/youreurope/business/taxation/vat/vat-digital-services-moss-scheme/index_en.htm



https://www.taxually.com/blog/when-and-where-to-charge-eu-vat-on-digital-services











W Fish said:






So it is dependant on the particular service or goods sold.

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Not only.