Does anyone know what the position is regarding Flat Rate VAT and EU sales? I have supplied services to a Dutch company, so do not charge them VAT. This sale will be added to my gross earnings by which my Flat Rate VAT is calculated. Therefore I will pay Flat Rate VAT on this sale even though I have not charged any . Many thanks.
Hi Paul,
I believe the answer to your question lies in Section 6.4 of VAT Notice 733:
Specifically: "If your business...sells services to other Member States of the EU...[and] if your supplies are outside the scope of VAT, leave them out of your flat rate turnover. This will depend on the place of supply of the services".
From your description it sounds like the place of supply is Netherlands, so you would exclude the sale from your flat rate turnover.
See this page for more details:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&id=HMCE_CL_000345#P292_27492
(Why do HMRC have such ugly URLs??)
Regards,
