Invoice to China for i.t services, need some help here.

Hi there, I've recently registered and been approved for VAT and need to backdate an invoice plus start charging VAT to my client in China. We provide I.T services to them and with the VAT to be added, this increases the costs. Am I right in thinking I simply charge my usual fees/rate, then add the VAT and then that's it, or is there some levy or VAT I need to add on behalf of my client in China. I looked in some places and it's saying it's 20% for UK VAT and then 6% for my Chinese client on top of that. This is the first time dealing with this and just wondering if I'm over thinking it and the 20% VAT is all I should add. Also, is my Chinese client able to claim all of this back when doing the VAT returns, they are also in the I.T industry? Many thanks, Rob

Hi RobertR78
If you provide IT services to a business which belongs overseas then this would normally be Outside The Scope of UK VAT .
The Place of supply rules determine where a supply is deemed to take place and so if you as a UK supplier performs these kind of services to a business which belongs overseas then it woulf be Outside The Scope of VAT.
Please see the guidance below:
6. The place of supply rules for services
Thank you.

I had a read over and was hard to pin point my situation exactly. I am running my services from the UK and delivering digital assets (art content) to my client in China. My Client in china pays 6% tax on services sought outside of their country. They are a game development company. So, should I still charge and hold VAT on my invoices to this client, or am I zero rate or outside the scope of VAT (if they are the same thing?). And, when it comes to box 6 of my VAT returns, I simply put in my sales figure there (assuming I have zero VAT if the above is true), then this figure is simply my excluding VAT figure. Please clarify. Tomorrow I speak with the accountant about this too, as there was the instruction for me to start charging VAT on all invoices. Many thanks, Rob

Hi,

If you are supplying digital services to a business overseas then this should be outside the scope of UK VAT. You would still complete box 6 of the VAT return to reflect that there is a supply but there would be no corresponding VAT in box 1. You can see guidance here:

VAT rules for supplies of digital services to consumers

Thank you.