Understanding B2B VAT, including reverse charge, on sales or purchases of goods in foreign countries; including Article 194 EU VAT Directive
One of the most complex areas of international VAT is understanding the obligations for non-resident companies when buying or selling goods in another country on a B2B basis. Especially for the EU where Article 194 of the EU VAT Directive gives member states many options to mandate. Countries may require the foreign customer or buyer to VAT register; or use the reverse charge and flip the reporting obligations to their counter party.
This short video shows how we have captured all of these rules in our tax engine, which VAT Advisor uses to give instant answers on key questions: who is responsible for charging and collecting VAT; should the reverse charge be applied; what invoice mentioning is required; and which boxes of the various returns should report the seller’s and customer’s reporting.
Watch an introductory video to using VAT Advisor. VAT Advisor also covers Triangulation transactions.
Solving the challenges with VATCalc
VATCalc covers all of the above requirements, whether on-screen (VAT Advisor and VAT Auditor), via an API call to our tax engine (VAT Calculator), or by posting the invoice to the correct VAT return box (VAT Filer):
- Full VAT calculation for both invoices and all parties
- Cites legislation articles relied upon for the conclusions, both EU VAT Directive and local legislation
- Produces invoices covering both legs of the transaction – and these may be simply flipped to purchase invoices so all parties may see their obligations in full
- Once you are happy and ‘commit’ the transaction, VATCalc can include the transactions in all the relevant VAT return within the same software. But this is just an option: you can use Advisor or Calculator separately.
