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German VAT

Newbie

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Replies 3

Hi,

We have had a quote for design services from a german company. Their quote includes VAT at 19%.  As an Australian company, do we have to pay this? If so, can I claim it back?  Or, if we don't have to pay it, can I simply ask them to not include it in their invoice?

Thank you.

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Most helpful response

Anonymous

Replies 2

The German based company has to obide by the taxation laws of its own country and if they are required to charge VAT then they must do it.   

 

If you have not done so already you can just simply ask them whether it applies to you as you are not based in Germany / Europe and whether they can remove it.  You could also research the German taxation laws or even give the German embassy a call if you really want to get to the bottom of it all.

 

As to whether you have to pay the VAT, is a matter for yourself and the German company and the ATO will not get involved in third party matters, especially matters that do not involve Australian taxation law.

 

You can not claim the VAT charged by another country as if it were an GST amount that you have paid in Australia, because it is not GST and is not claimable under GST legislation.

 

You can however claim the VAT as part of the cost of the service against your assessable income.  This means you claim the total of the amount you pay the German company including VAT for income tax purposes.

 

ATO business line 13 28 66

3 REPLIES 3

Most helpful response

Anonymous

Replies 2

The German based company has to obide by the taxation laws of its own country and if they are required to charge VAT then they must do it.   

 

If you have not done so already you can just simply ask them whether it applies to you as you are not based in Germany / Europe and whether they can remove it.  You could also research the German taxation laws or even give the German embassy a call if you really want to get to the bottom of it all.

 

As to whether you have to pay the VAT, is a matter for yourself and the German company and the ATO will not get involved in third party matters, especially matters that do not involve Australian taxation law.

 

You can not claim the VAT charged by another country as if it were an GST amount that you have paid in Australia, because it is not GST and is not claimable under GST legislation.

 

You can however claim the VAT as part of the cost of the service against your assessable income.  This means you claim the total of the amount you pay the German company including VAT for income tax purposes.

 

ATO business line 13 28 66

Newbie

Replies 1

Thanks MVF.  I rang the ATO and they gave me the same advice. It depends on  german law and the supplier can advise on this. I'm waiting to hear back from them. Thank you again for your help. 

Newbie

Replies 0