Q:
Hi,
We supply estate agent services from the UK to a Czech property developer and charge a fee to them. Am I correct in assuming that our invoices to them should show zero rated Vat and that they then have to pay Czech Vat on the transaction? Do we also have to complete a Eurostat return and, if so, is there a minimum annual amount before we have to file such a return?
Thank you
David
A:
Hello David
It seems as though your query falls within the “place of supply” provision because it relates to services supplied to overseas business. I’ve explained the rule briefly here https://vatexchange.co.uk/node/325.
Normally, services supplied to overseas businesses are outside the scope of UK VAT, but if your service relates to land and property in the UK, it would fall outside the normal rule and be liable to UK VAT. This is explained in VAT Notice 741a, Place of Supply of Services, section 6 http://tinyurl.com/6loq2h4.
If the Czech developer is providing services relating to land or property in the UK, then it may be liable to register for VAT in the UK, so would be able to recover the VAT charged on its UK VAT returns. Otherwise it may be entitled to recover the VAT through the EC VAT Refund scheme.
As the supplies are made within the UK and therefore probably liable to UK VAT, you don’t have to complete an EC Sales list for them.
Marie