what is vat? - introduction - mffa belastingadvies | tax advice
TRANSCRIPT
MFFA Belastingadvies | Tax Advice
Specialized in Expats and International Companies
Amsterdam | Zwolle | Assen
The Netherlands
VAT In Europe how does is work?
Introduction of VAT
InvoicePrice excl. VAT € 100,-
VAT 20% € .20,-Price incl. VAT € 120,-
• What is this?• Do you have to charge this?• Can I get it back?
Entrepreneur A supplies goods and/or services
Entrepreneur A
Supply of goods and/or services
??? B
• Entrepreneur A is obliged to charge VAT on goods/services supplied (EU VAT Rules prescribe this ability).
• The recipient can deduct the VAT if he is an entrepreneur.
??? B receives an invoice
Entrepreneur A
??? B
€ 120,-
InvoicePrice excl. VAT € 100,-
VAT 20% € .20,-
Price incl. VAT € 120,-
€ 120,-
€ 20,-
€ 100,-
€ 20,-
• Entrepreneur A charges € 120,- (invoice incl. VAT) to B.
• Entrepreneur A pays € 20,- VAT to local Tax Authority
Tax Authority
Can ??? B reclaim the paid VAT
??? B
InvoicePrice excl. VAT € 100,-
VAT 20% € .20,-
Price incl. VAT € 120,-
If ??? B is an entrepreneur,
he can reclaim the paid € 20,- VAT.
Entrepreneur B
€ 20,-
If ??? B is a private individual (“PI”),
he cannot reclaim the paid € 20,- VAT. .0.. PI
B Tax Authority
Basic principleVAT Rate 20%
SupplierSupplier
Tax Authority
€ 0
ManufacturerManufacturer€ 40
Sales € 40,- Cost of Goods € 0,-Added Value € 40,- Taxes to be paid € 8,00
€ 8,00
RetailerRetailer€ 60
Sales € 60,- Cost of Goods € 40,-Added Value € 20,- Taxes to be paid € 4,00
€ 4,00 ConsumerConsumer€100
Sales € 100,- Cost of Goods € 60,-Added Value € 40,- Taxes to be paid € 8,00
€ 1208,00
Total added value € 100,-VAT 20% € 20,-
This € 20,- tax is a burden for the consumer. It has been paid indirectly to the tax authority through tax returns and reclaims by the supplier, manufacturer and retailer.
When does VAT apply
Situation 1United States Europe
Import
Import VAT is due by importer of record
When does VAT apply
Situation 2 Europe
Intracommunity supply
VAT 0% applies under conditions
The Netherlands Germany
When does VAT apply?
Situation 3
Local Supply VAT 19%
The Netherlands
AB
When does VAT apply?Situation 4
United States Europe
Export
0% Export VAT-rate applies under conditions
When does VAT apply?
Situation 5 Europe
Intra community acquisition
VAT-charge is reversed to recipient, local VAT in country of recipient is due but can be deducted as input again.
The Netherlands Germany
Pitfalls
• Formal rules for intracommunity supplies and acquisitions are not met
• Distance sales• Incorrect invoices (incorrect reflection of supply
at hand)• Incorrect filing of returns leads to problems• Incorrect (local) VAT rates reported
Contact
For further information please do not hesitate to contact us:
E-mail: [email protected]: www.mffa.nl
