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VAT Returns – an international perspective

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VAT is a European tax and changes in business practice and markets means that more and more businesses are trading internationally. The change in the place of supply rules for services in 2012 had added a new dimension to the completing of VAT returns and thus it is important to understand which parts of a VAT Return require to be completed and in particular the statistics boxes 6, 7, 8 & 9. Inconsistencies in completing these boxes may well result in exception reports being raised which in themselves could give rise to time consuming VAT visits. Correct completion is about minimising risk.

Below is a brief summary of the boxes which would need to be completed for any given type of supply.

Buying in Services from abroad. This usually involves an output and input claim in boxes 1 and 4 (the relevance to reporting in both boxes is tied in with the potential for partial exemption to the box 4 entry). There will also be net of VAT entries in boxes 6 and 7. 

Selling services abroad. If the customer is a business (which in most cases it will be) the only entry will be in box 6. There is a common misconception that overseas sales are recorded in boxes 8 and 9. These two boxes are only relevant to the sale of goods.

Buying in Goods from abroad. If the seller is in the EU, the box entries will be boxes 2, 4, 7 and 9. Whilst if the seller is outside the EU, the entries will be boxes 4 (based on the VAT paid on importation and supported by a C79 certificate) and 7.

Selling Goods abroad. Boxes 6 and 8 will record a sale to a VAT registered EU customer but only box 6 to a non-EU customer.

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