Charge VAT to Spanish company even though we both are VAT registered

[tradyan 6]

Hi folks 

 

Situation: 

 

I have a German VAT registered company that is having 100% International clients, and is basically a consultancy, matching up buyers and sellers in the FMCG space. One of our main clients in the UK asked us for some extra help. 

 

He got a customer in Spain, and since Brexit some regulations changed making it hugely challenging for them to do business. Interestingly enough, if the goods came through Germany (so a German company imports them) and so get sent to Spain its smooth sailing. 

 

We did a test run a few weeks ago, I was charged with VAT for the imports, and got a surprise the other day from my German bookkeeper who said that as I don't do „Dreiecksgeschäft“ to claim back the VAT is a long shot. 

 

The UK / Spain guys are already working on their next shipment so does anyone know how this VAT situation can be solved? Even though both me and the Spanish customer are VAT registered, could I charge them the VAT on top of the costs of the goods? 

 

In the 1st round we never paid for the goods, Spain paid the UK, but we could buy the goods from the UK; do a slight markup if thats legally required, and sell to Spain for COGs+markup+VAT? 

 

Any ideas?

 

Thanks 

T 

[GoBike 137]

The problem as I see it is that Spain is paying for the goods. You can lose money and still claim the Ust paid to Germany on importing from a 3rd country. Also are the goods 100% UK produced as required under the trade deal or exempt from EU import duty? There is no requirement to charge Ust to the Spanish company if compliant under EU rules.

 

[tradyan 6]

Hi and thanks for your reply 

 

Goods are 100% UK produced, so thats all fine. The issue is as said that I had to paid import VAT in Germany, close to 10K. As a one off either the producer or buyer will fix this so I am not out of pocked, but this needs to work in the long run, so question is how it can be done. 

The Spanish guys are OK to get billed with VAT as they are a distributor, so having a huge VAT in/out in Spain. But I am not sure if I am even allowed to send them an invoice with VAT on it... 

 

 

[GoBike 137]

You cannot charge Spain the VAT its an EU export to a company. You have to at some stage own the goods on your books. Your claiming VAT back when you have not purchased anything. This will look very bad for you. You will also need proof the goods where exported to Spain so its important you have copy's of all the shipping documents, EU site has tons of information on this. Its a great opportunity to do business do not stuff up the paperwork side. Also as the actual EU importer you do realise that you are the responsible person for any product liability or product recalls ordered? Brexit taking back control.