Hi there
The customer who have raised this I have found out for you guys why we are charging you 23% VAT and not the regular UK 20% VAT.
Here is an explanation from our Finance Director:
Hi Andrew
I have copied the attached paragraph from the EU website on Taxation and Customs Union. The second paragraph clearly states that for sales to private individuals, VAT of the member state of destination has to be applied, once a certain threshold has been reached, which for Ireland is €35,000 per year.
Distance selling of goods
Distance selling means that a supplier sells goods to private individuals or customers established in another Member State who do not apply VAT to their intra-Community acquisitions of goods. The supplier takes care of the transport of the goods to the customers. A typical example is mail order companies.
VAT of the Member State of destination is applied if sales in that Member State exceed a certain threshold (EUR 100 000 or 35 000 or the equivalent in national currency). For the threshold applicable in each Member State , see the Commission's information document "VAT in the European Union" or Thresholds - Annex I (25 kB). Even if the threshold is not exceeded, traders can still opt to identify for VAT in the Member State of the consumer and charge the VAT applicable in that country.
Therefore if UK companies are charging UK VAT rates, either their annual turnover to Ireland must be below €35,000, or else they are in contravention of the EU VAT regulations, and they will have to pay VAT to the Irish Revenue at 23% for the periods when they should have been VAT registered in Ireland.
Regards
So in short it is because we have exceeded the set thresholds for shipments to Ireland and are following the law to the letter.
Hope this helps to explain this.
The customer who have raised this I have found out for you guys why we are charging you 23% VAT and not the regular UK 20% VAT.
Here is an explanation from our Finance Director:
Hi Andrew
I have copied the attached paragraph from the EU website on Taxation and Customs Union. The second paragraph clearly states that for sales to private individuals, VAT of the member state of destination has to be applied, once a certain threshold has been reached, which for Ireland is €35,000 per year.
Distance selling of goods
Distance selling means that a supplier sells goods to private individuals or customers established in another Member State who do not apply VAT to their intra-Community acquisitions of goods. The supplier takes care of the transport of the goods to the customers. A typical example is mail order companies.
VAT of the Member State of destination is applied if sales in that Member State exceed a certain threshold (EUR 100 000 or 35 000 or the equivalent in national currency). For the threshold applicable in each Member State , see the Commission's information document "VAT in the European Union" or Thresholds - Annex I (25 kB). Even if the threshold is not exceeded, traders can still opt to identify for VAT in the Member State of the consumer and charge the VAT applicable in that country.
Therefore if UK companies are charging UK VAT rates, either their annual turnover to Ireland must be below €35,000, or else they are in contravention of the EU VAT regulations, and they will have to pay VAT to the Irish Revenue at 23% for the periods when they should have been VAT registered in Ireland.
Regards
So in short it is because we have exceeded the set thresholds for shipments to Ireland and are following the law to the letter.
Hope this helps to explain this.