What VAT should I be charging on EU services?

If you’re a company within the UK and you’re selling your services to clients you’re going to want to be aware of how the situation changes regarding VAT. It’s not as simple as providing services to clients here in the UK whereby you charge the standard VAT of 20%. If your client is within the EU, more specifically within the EU, you don’t need to charge them VAT as they will be charged VAT in their home country. If you charge VAT on top of this will lead to you overcharging the customer and potentially frustrating them and losing their custom.

 

However, there are certain exceptions to these rules and it’s important for you a business owner to know exactly what these exceptions are:-

 

  • Hiring transport for your clients.
  • Services in regards to either property or land, this could be a valuation for a property if you are in real estate or even for essential repairs to a building.
  • Events such as business conferences.
  • Any services in regards to catering or restaurants.
  • If you manufacture goods for the client this is also an exception.
  • If your services are intermediary based such as if you’re a loan or lease broker or estate agent.
  • Any and all DIGITAL services.

 

If your company ticks any of those boxes above you are still entitled to charge VAT for your services to clients who are based within the EU as these won’t be strictly covered domestically by the respective countries tax law. Importing products from countries within the EU also don’t carry with them a VAT tax however if you were to order from a country the standard 20% VAT tax would apply. However, these are how the rules work at the moment. Going forward we have uncertainty with Brexit so we are no longer sure on what trade deal is going to be worked out with the EU and how this could affect the VAT rates of EU services that your company should/can charge.

 

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