VAT on B2C services supplied to an EU client charity

Two Questions: 1. Is my understanding correct that our supply is out of scope for UK VAT? 2. Can anyone share advice on the need to separately register for VAT in the EU country of service supply? We are a VAT registered UK based Ltd company supplying environmental assessments and impact mitigation advice to clients in the UK and Ireland. From VATPOSS07600 (• services of estate agents, auctioneers, architects, surveyors, engineers and similar professional people relating to land, buildings or civil engineering works and management, conveyance, survey or valuation of property by a solicitor or surveyor) We are basing our workings on the service we supply being a land related service. Our client is a non VAT registered Irish charity, the service supplied was related to lands in Ireland. So is this then a land based service to a non-registered EU charity client are B2C and so out of scope of UK VAT? And then by https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec7 ... "If you are supplying land related services then the provisions mentioned in paragraph 7.6 will apply. If the recipient of the service is VAT registered in the country where the land is, they should use the reverse charge procedure to bring the VAT to account. If they are not VAT registered you’ll be liable to VAT in that country and may have to register there (read paragraph 5.9)." We 'may' have to register for VAT in Ireland .. Has anyone advice or experience to share? Thoughts welcome Thanks Vince

Hi VinceCWO, As a taxable person (supplier) not established in the EU providing B2C supplies of services (transaction to non-registered EU charity without the valid VAT number is considered B2C transaction), including services connected to movable tangible properties, you can register in one EU Member state of identification under the non-Union OSS scheme and report and pay VAT for all transactions covered in the non-Union OSS scheme. Some of the transactions covered in the non-Union OSS scheme are: - Accommodation services carried out by non-established taxable persons - Admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events, such as fairs and exhibitions - Transport services - Services of valuation and work on movable tangible property - Ancillary transport activities such as loading, unloading, handling or similar activities - Services connected to immovable property - Hiring of means of transport Hope this helps.

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec2 at section 2.4 it states :- B2C supplies means supplies to a: private individual charity, government department or other body which has NO business activities ‘person’ (natural or legal) who receives a supply of services wholly for a private purpose B2B supplies means supplies made to businesses. It also includes supplies to customers that have both business and non-business activities such as charities, local authorities and government departments. Unless you have information that suggests the service is wholly for private use, you may presume that your customer is in business if they provide you with their VAT number. So this is quite nuanced, if the charity is in business (making sales) but they are below the VAT threshold, they are still seen as a business (B2B), but if the charity is 100% fully funded by donations only and does not make any kind of sales, then it is likely be seen as not in business and treated as B2C for VAT purposes. The European legislation mirrors the UK legislation, see this link here https://taxation-customs.ec.europa.eu/where-tax_en which focuses on whether the customer is in business or not, you could be a business but if buying goods for a personal use would be seen as a B2C sale, the status of the business (VAT registered) indicates a business purpose but that may not be the case. The EU guidance states "The place of taxation is determined by where the services are supplied. This depends not only on the nature of the service supplied but also on the status of the customer receiving the service. A distinction must be made between a taxable person acting as such (a business acting in its business capacity) and a non-taxable person (a private individual who is the final consumer). The concept of a taxable person covers anyone who independently carries out an economic activity, even if that person is not identified for VAT purposes, but it also includes a non-taxable legal person identified for VAT purposes [Article 43 of the VAT Directive]." Yes, having a VAT number removes any doubt as to the status of the charity/customer, but VAT thresholds exist across the EU and an Irish charity might simply be below the VAT threshold in Ireland, still a taxable business just not VAT registered. So I think the answer is it depends on the status of the customer, once that is established, then the answer should reveal itself.

In the EU, taxable person can be a small business (below the VAT registration threshold in the country of establishment) and have the EU VAT number for the purpose of Intra Community acquisition of services and goods. In this case taxable person would have a valid VAT number that can be checked in the EU VIES. Their suppliers can issue invoices with the reverse charge (B2B transaction), but when recording acquisition of the invoices, taxable person would need to calculate and pay VAT on the acquisition without the right to deduct the input VAT. Because of this, valid VAT number of the buyer is is mandatory for applying reverse charge on the B2B invoice in the EU.

Hi VinceCWO,

If you provide land related services to a non business in the UK then the Place of Supply would be Outside The Scope Of VAT.

The likelihood is that if the customer is VAT registered in the EU then the supply would be subject to the reverse charge procedure in Ireland.

However if you provide the land service to a non business entity in the EU then the Place of Supply will also be Outside The Scope of VAT in the UK but there will be a requirement to register for VAT in Ireland.

However I would always check with the member state so that they can cofirm the requirements.

Thank you.

Thank you very much for the replies, quite useful. Intertrade Ireland supplied similar. I have registered with the Non-union OSS (very straightforward) to account for any B2C vat due. One last question ... When invoicing a B2C EU customer, what line description would you use to describe the VAT ...? Member state VAT @ xx% €xx.00 or ...? Would you include an explainer as well? many thanks 

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Hi VinceCWO,
If you are providing an invoice to a consumer then a VAT invoice wouldn't be necessary, at least not in the UK.
However if you are raising an invoice and tou refer to the VAT on the invoice then you would state the member state VAT and the rate of VAT applicable.
Thank you.