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Can an Indonesian company charge VAT to an Australian company?

If my UK company does remote desktop IT work for a client who's based outside the UK, do i charge them VAT?

  • If my UK company performs some remote desktop IT work for a client who's based outside the UK (Australia in this case), am i due to charge VAT as the 'service' is provided from the uk or because the 'service' is performed remotely in Oz, do i not need to charge the client VAT as outside UK - Confused???

  • Answer:

    Place of supply is generally where the customer is based unless a non-business customer within the EU. If customer is VAT registered within EU - Zero rate supply, customer must reverse charge VAT in own country, Non VAT registered (non-business customer) within EU - VAT should be charged at standard rate. Customer based outside the - Zero rate supply.

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Beware, the answers that say VAT is not charged on goods sent outside EU are grossly misleading, because you are providing a service, not goods. VAT rules on provision of services usually require you to determine both place of supply and place where your client belongs, for each of which there are three possible answers - UK, rest of EU and rest of world. Further, there are special rules for electronically-supplied services (but those appear to be for imports to EU, so I wouldn't worry about them. The link has HMRC guidance

Geoff

No. You don't charge VAT to a country that is not in the VAT scheme (like Australia or USA). With goods they have to be sent out of the country within a certain period (a month?) but a service is a bit different (it cannot be held in the country where it is sold). Make sure you have the person, or comapny's full overseas address on your records. You just need the record, you don't have to prove they are non-resident for VAT.

Raysor

You accountant will clarify, however 'by default' VAT is payable at the CUSTOMERS location, so 'no' ...

Steve B

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