german_potat

Hi. Suppose the following situation: A freelancer based in Germany (registered as a single-person-company in Germany) provides software development services (to be specific, this means writing / editing source code, not selling a software product themselves) over the internet to a UK company A. Despite company A being registered for VAT in the UK, company A does NOT make use of the reverse charge procedure, so the responsibility to pay VAT is on the freelancer. In addition to that, most of the development services actually happen for an US company B, who bought services from company A. So the freelancer contributes to development of company B's software most of the time. Since it is a B2B transaction, it seems the VAT has to be paid by the freelancer to the place of supply country. Questions that arise here: - Is the place of supply in this scenario the UK, regarding work on company B's product? I'm not sure if "use and enjoyment" rules could apply here. I think this depends on the following questions: - Can those rules cross company boundaries, i.e. does the freelancer have to care about where company B is registered? - Is writing / editing source code and transmitting the results over the internet an "electronically supplied service"? - Does some of the code being open source have any impact on where "use and enjoyment" happens? (though most of it is not open source) - Is company A actually allowed to NOT make use of the reverse charge procedure here, despite being registered for VAT in the UK? Kind Regards