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]

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

19% VAT.

Rude and weird about VAT.⁢

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

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

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

If you want to︇ be sure that what you're saying is correct, first speak with an EU/German tax adviser︈ 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, you︊ 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]

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?

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

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 get︀ out offering him a refund if the 19% and telling him they the VAT registration︁ is on the way.

 

[W Fish]

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 place︀ of supply is Germany, such as certain consulting, event-related services, or services connected to immovable︁ property in Germany.
So it is dependant on the particular service or goods sold.

 

[Sols]

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

Not only.

 

[BasedOperative]

You’re outside of the scope of EU VAT for B2C services/consulting if the place where‌ the supplier of the service is located is outside of the EU. This is way‍ different if you sell physical or digital products that are delivered automatically. In that case⁠ you have to apply the VAT rate of the country where the customer is located⁤ (and pay it via OSS). This isn’t your case though.

You’re all good, just explain⁣ it to him. Imo Europeans are just mad they have to pay sky-high taxes and⁢ you don’t, lol

 

[alley]

Don't you have to charge VAT if you for instant have a Seychelles company which‌ not is inside EU ?