I don’t think that the German law is different form the other EU countries. It doesn’t make sense that the labor to balance a turbine has a different tax depending if the engine is new or used.
As we manage close to 2k exports each year and want to be sure that we are doing correctly, I had just checked again with our VAT consultant.
Don’t want to write a long post, but the resume I got is:- Since 2010 the VAT rate is related to the “place of supply”. The place of supply is where the goods are being used or consumed. Not were the goods have been manufactured or sold. In this case, if the turbine would have used in Germany, then the place of supply would be Germany, thus taxable.
- As general rule, all goods and services where the place of supply is outside EC are VAT exempt, except some intangible services like software licenses, consulting, etc that have special rules, and that aren’t physically exported, that the seller don’t have a proof of that these goods left the European community.
- The work (man hours) used on a good for repair, modification, improvement is considered as that this particular good increase its value in same way as the parts used in the process. No difference between man-hours and bearings. At the end of the process you have a good with an increased value, so it is taxable... if place of supply is inside EC.
In order to issue a zero VAT invoice for a sale outside the EC, there are some requirements. The shipper should be registered as exporter (should have an EORI register number), should fill all the export paperwork for each shipment, and should maintain and keep the books of exported items for 5 years. All of this mean an increased workload (and cost!) in the supplier side, but the savings from customers avoiding a double tax are important.
Anyway, the objective of my post is not to discuss about the fine print of the tax laws, nor if the German law is different from other EC countries; what I wrote above comes from an Spanish VAT expert, not German. The objective of my post, as I stated in my previous post, is that I don’t agree with the thread tittle, the “European” word, as in my view the problem that Pete had is not “European”, it could be “German” if Thomas is correct or it is of this particular invoice if he isn’t. But not “European”!, in other European countries the exporters don’t charge VAT to his customers outside EC for goods or repairs.
All the best,
Gaspar
Last edited by Gaspar; 09-06-2017 at 11:17 PM.
Reason: typo