Handling a Chinese supplier invoice in my VAT return

Good day, I am after a bit of advice on how to handle an invoice from China in my UK VAT return. I am a VAT registered sole trader using Cash accounting based in the UK. My supplier in China provides translation services where the deliveries are translated files/documents. These are sent to me electronically. The files are for a customer in the EU. My supplier in China as part of their quote include a cost line entry ‘Tax by China (6.77%)’. In discussions with my supplier, they confirm this is their local VAT amount they need to charge me for their service. My question is, do I need to account for this 6.77% for UK VAT purposes, or do I count this just as part of their service cost, as they are based in China. If I do need to account for this, after payment of the invoice (they invoice in USD) take the final GBP conversion figure from my bank statement, for the payment, and allocate 6.77% of the GBP cost as VAT, in my relevant quarterly return? Many thanks for your feedback.

Hi. If you are being charged a service from China then this would normally be accounted for by yourself under the reverse charge procedure. Please see the guidance below: Place of supply of services (VAT Notice 741A)  . The amount which is charged to you by the Chinese business including their local tax will be the amount on which to base the reverse charge on. As the Chinese local tax isn't UK VAT then it would not need to be reported separately on the VAT return  . Thank you .

Many thanks for your guidance - much appreciated