Charge VAT on contract software development to Germany?

[ashleymoran]

Hi

Quick accounting question, I hope. If I do software development for a firm in Germany (providing them with the source code, not building a service I would host and charge them for), do I charge them VAT on the invoice?

Ta
Ashley

[ASB]

Hi

Quick accounting question, I hope. If I do software development for a firm in Germany (providing them with the source code, building a service I would host and charge them for), do I charge them VAT on the invoice?

Ta
Ashley

Search on HMRC, there is info there but it is not entirely clear. Also call your vat helpline.

It is not a simple yes or no. The answer is usually no though.

[ashleymoran]

Search on HMRC, there is info there but it is not entirely clear. Also call your vat helpline.

It is not a simple yes or no. The answer is usually no though.

Ok thanks, I will try to decipher the HMRC info. Might try my bank when they open the account, signed up for a Co-op clarity account, so might as well put their helpline to good use...

[ASB]

HMRC vat helpline would be a better bet than your bank.....

In general there is no VAt chargeable on export services (so the develoment effort etc should not be an issue). It's all about the place of supply - which is often not where it is actually supplied there are defualt rules based on the vat status of the supplier and the client.

However, it also seems you are also proposing to be hosting some service or another for them. There are potentially different rules here related specifically to internet type services.

[ratewhore]

When I bought my MS action pack, it was from Germany so they charged German VAT and I couldnt claim it back...

[Dow Jones]

Some are taking the p1ss..

VAT rules are clear, if you are based in the UK and supply services to Germany, strictly no VAT should be charged. I did come across some Indian monkey suppliers who set up a PO Box address here and charged us VAT. Sent it back unpaid and passed invoice to C & E.

[spoons]

When I bought my MS action pack, it was from Germany so they charged German VAT and I couldnt claim it back...

When I got mine you entered your VAT# and did'nt pay the VAT

[ashleymoran]

HMRC vat helpline would be a better bet than your bank.....

Have found HMRC helplines very mixed so far, had one extremely unhelpful guy that put me off calling back. I'll try again though.

In general there is no VAt chargeable on export services (so the develoment effort etc should not be an issue). It's all about the place of supply - which is often not where it is actually supplied there are defualt rules based on the vat status of the supplier and the client.

I have been on the HMRC site but everything I can find relates to export of goods. You wouldn't happen to know if they have anything about services online, would yo?

However, it also seems you are also proposing to be hosting some service or another for them. There are potentially different rules here related specifically to internet type services.

Sorry, I was trying to point out what I was NOT doing, to make it more clear Including the word NOT may have made this more clear

[ashleymoran]

I did come across some Indian monkey suppliers who set up a PO Box address here

Were the monkeys for business use only?

[ASB]

Have found HMRC helplines very mixed so far, had one extremely unhelpful guy that put me off calling back. I'll try again though.

Sorry I missed the not

Finding anything on HMRC can be a bit of a nightmare I know.

"vat services place of supply" is a good query.

This is probably the most relevant document:-

http://customs.hmrc.gov.uk/channelsP...yType=document

Section 1.5, 1.6 and 11 are probably the relevant ones. If you are providing intellectual services then the supply of services is the EC member state and they are being provided for business. [no vat]

Otherwise the supply of services is probably in the UK and zero rated - provided you have the vat number of your customer and you have not been informed it is invalid.

Where there is a potential gotcha (and I never got a satisfactory confirmation of this) is in relation to the FRS vat scheme.

Export turnover is included in the total you need to account for vat on in the FRS unless it is outside the scope of UK vat. Hence confirmation can be important - after all you don't want to be paying 13% of the value of services to HMRC when you haven't charged it.

So, no you aren't going to need to charge VAT but be cautious if you are on the FRS scheme because it will be to your disadvantage unless you can agree that the supply is outside the scope of UK vat.