Re: EU VAT

[Chris Travers <..hidden..>]

On Mon, Aug 8, 2011 at 9:57 AM, Nigel Titley <..hidden..> wrote:
> On Mon, 2011-08-08 at 16:34 +0100, lrspares45 wrote:
>> On Mon, 2011-08-08 at 07:59 -0700, Chris Travers wrote:
>> > Hi;
>> >
>> > How many here have to report EU VAT?  How do you track tax rates and
>> > do your reporting?
>>
>> Each country has it's own VAT rate, so for the UK I just set the current
>> rate in taxes, and use the 'start date' for changes. This seems to work
>> ok.
>
> Yes, this works fine. And is the very simplest case.
>
>> If sending goods to other EU countries, UK VAT is charged at the usual
>> rate, unless the customer provides a VAT number, in which case the goods
>> are supplied VAT-free, but sale has to be recorded on a supplemental VAT
>> form. This turns up if you put anything other than zero in the 'Supplies
>> to other EU countries' box, which is for VAT free supplies where a VAT
>> number has been supplied. I just recorded these by keeping the printed
>> invoices in a separate file! Purchasing from another country I'm not
>
> Yes, this is called the ECSL form. I make enough of these that I have a
> perl script that crawls the LedgerSMB database and generates a file of
> the appropriate format to directly load up to the online submission
> system.

With 1.3, we can probably simplify this a little bit with the tax form
reporting API (we'd have to write a query to grab the records
correctly).
>
>> sure about, as I never have. You can claim back the VAT paid in the
>> source country if you have paid it, or you have to pay VAT at your local
>> rate if you provided a VAT number to be exempted.
>
> Purchasing from another EU country is a little odd. You can't claim back
> VAT paid in another country... ever... and the taxman will string you up
> by your heels if you try it. However, if you quote a valid VAT number to
> your supplier then they will supply it VAT free. You may think this is
> the end of it, but no. You have to account for the VAT you didn't pay by
> charging it to yourself and then claiming it back, at the local rate.
> This is the "reverse charging scheme". I handle this by creating another
> tax class "Reverse VAT" and charging normal VAT + reverse VAT on the
> appropriate transaction.

Ok.  that's helpful as well.

>
> Purchasing from outside the EU is fairly straightforward. VAT is paid on
> the goods' entry into the country, usually to the shipping agent. This
> can then be claimed back, as per usual, at the end of the quarter. Every
> month the taxman sends you a list of incoming payments which you then
> need to match up against your claims. If they miss one, then too bad,
> you can't claim it back.

In what format do these come in?  Is there an electronic format?
>
>>
>> VAT is payable every three months, i.e. quarterly. The details are here
>> http://www.hmrc.gov.uk/vat/managing/returns-accounts/completing-returns.htm
>>
>> and you should be able to down-load the form from that site.
>
> But you will shortly *have* to complete your return online.

Ok.   Either way it seems the key is to be able to ensure we can
generate the reports needed.  How we present these (on paper vs
electronically) is a presentation issue and can be handled in a
country-specific way if we need to.  What I'd like to know then is:
1)  What sorts of reports are needed that we don't have?  What could
be added to reports we have to make them work?
2)  Is there a specific electronic format needed for the UK system?
>
>> There is a flat-rate scheme for those that choose that option, details
>> here
>> http://www.hmrc.gov.uk/vat/managing/returns-accounts/fat-rate-returns.htm
>>
>> The VAT people are actually amazingly helpful, they may even send you
>> assorted booklets if you ask them.
>>
>> Records have to be kept for 7 years (under pain of death). Errors, under
>> £10,000 I think, can be sorted out using the normal form, but bigger
>> ones require a call to the VAT man.
>
> £2000, but they are actually quite helpful as long as *you* make the
> declaration. If *they* find out then they are a lot less helpful and you
> end up playing games along the lines of
>
Heh.  I can imagine.

Best Wishes,
Chris Travers