Charging VAT on Service for UK but invoicing Germany

[Lauren]

Good afternoon,

I wondered if you could help me answer a query. We are a VAT registered Recruitment company and have just completed some recruitment for a Global Telecoms Services Provider. The role sits within their EU business, so we are invoicing their German business, however the role is based in the UK, the candidate will be working in the UK, the salary is in GBP, and so ultimately our services were delivered in the UK. We have invoiced them today and added VAT on, but they have come back to ask us to take the VAT off as they don’t believe it is applicable. Please can you advise? Thanks.

[VAT-adviser]

The place of supply for business to business transactions (B2B) is the place where the business customer ‘belongs’. Hence services to EU businesses, the place of supply is where the business customer ‘belongs’ ie German in your case, hence VAT should not be charged but the sales is included in the EC sales list.

[Author]

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