Claim VAT back for item purchased and delivered within the EU

We are a UK based company who have a supplier in Italy who we usually import from for distribution with the UK and so pay import VAT claimed back via PVA On this occasion our supplier in Italy shipped the goods directly to our customer in Ireland and charge us 22% VAT which I understand and accept. However I don't know if we are allowed to claim this 22% back via our VAT return - Please can someone advise Thank you

Hi,

If you have been charged VAT in Ireland then you would not be able to recover this VAT on your UK VAT return.

It appears that the Italian company are making a supply of goods to you in Ireland and hence that is why they are charging you Irish VAT.

If you are then making an onward supply to your customer in Ireland then there would be a requirement for you to register for VAT in Ireland in order that you charge Irish VAT to the

customer.

I would recommend contact the Irish authorities to confirm your VAT obligations there.

Thank you.
 

Just to add to HMRC's response, you can never reclaim foreign VAT on a UK VAT return, you can only reclaim UK VAT charged by UK VAT registered businesses on a UK VAT return,....remember how VAT is meant to work between two companies in the same Country. From what you describe, the Italians have correctly charged Italian VAT because they have sold the goods to you in Italy (domestic sale in Italy), title/ownership of the goods moves from Italian supplier to you - physically - in Italy, Italian supplier has then shipped YOUR goods from Italy to Ireland. Technically you have acquired goods in Italy, place of supply of goods is where the goods are at time of sale, as you sold goods that you physically own in Italy, you are required to register for VAT in Italy because you are a UK company, not an Italian/resident company, VAT registration threshold for non-resident companies is Nil....you would register for VAT in Italy, reclaim the 22% VAT charged by the Italians as input tax on your Italian VAT return and then you would make an Intra-EU zero rated sale from Italy to Ireland. If it is a one-off and nobody has noticed then take the 22% hit on your profit margin and don't do it again or if this is going to be a regular arrangement, then consider registration in either Italy (where your supplier is) or Ireland (where your customer is) because whichever you choose, you'll then have a foot in the EU in terms of VAT and so you're not losing out on irrecoverable foreign VAT).