Calculation of VAT
January 26, 2011 | 20,00 EUR | answered by Matthias Wander
Dear Sir or Madam,
Here is my question regarding the calculation of value added tax:
Entrepreneur A from Cologne purchases machines for his customer from dealer B in Hamburg. Entrepreneur A commissions a transport company to transport the machines from the premises of dealer B to the port for shipment to Russia (to his customer). Dealer B invoices the machines to Entrepreneur A. Should this invoice include a value added tax, which would then also have to be paid to dealer B, or is there a possibility to purchase the machines without input tax by indicating the export to a third country?
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment within the framework of an initial consultation.
This situation involves a VAT chain transaction. Multiple entrepreneurs enter into sales transactions concerning the same item, and the item is transferred directly from the first entrepreneur to the final customer. From a VAT perspective, there are 2 deliveries, one of which is a mobile delivery and one is an immobile (resting) delivery.
In your case, the middle entrepreneur dispatches the goods. He is both a customer (of B) and a supplier (to Russia). Since A has instructed the carrier on his behalf, he primarily acts as a supplier. Therefore, the delivery from A to Russia is the mobile one. The place of delivery is in Germany. It is taxable but tax-exempt, as it is an export.
The place of the (immobile) delivery from B to A is in Germany. Thus, taxable and subject to tax. The invoice must be issued with German VAT. The VAT can be deducted by A as input tax, if further requirements are met.
I hope this gives you a first overview.
Best regards,
Wander
Tax consultant
