Re: how to calculate VAT

In article <443ad608$1@xxxxxxxxxxxxxxxxxxxxxx>,
cvinal@xxxxxxxxxxxxxxxxxxxx says...
We have a delphi application that needs to calculate the VAT for companies
selling products from the United States to European countries. I figured the
international background of many of this forum's participants would help
anwer this question. Most of the products are educational products - e.g., a
book, CD, paper. Is the VAT tax based upon where the customers live? e.g.,
charge 20% to customers in France, 17.5% for those in Britain, etc? Or is it
based upon the country from which the product is bought? (e.g., charge same
VAT tax to all customers based on sale of US product). Any help is greatly
appreciated.

As you have probably gathered from the initial responses, it's a bit
more tricky than just "what %age do I charge? sellers country's rate or
buyers country's rate".

You may also need to be aware of duty rates.

Also, you mention educational products - be aware that some countries
may have specific VAT/Sales Duty exemptions or qualifications for
educational institutions and/or educational products.

Alternatively you may not need to be aware of any of these things,
depending on how the supplier accounts for shipping charges etc.

i.e. if I buy something from a US supplier for shipping to the UK, I am
not charged any VAT or Sales Tax by the US company. I pay for the goods
and the quoted shipping charge and the goods are dispatched.

At the point that the goods reach UK shores, HM Customs and Excise will
levy Excise Duty and VAT (any import Duty being a separate charge to the
VAT!). Most international shipping companies have arrangements in place
to pay those charges on behalf of the recipient and then invoice them
separately for it. Even if goods are sent by bog-standard airmail, the
UK postal service will themselves calculate UK duty and VAT based on the
stated value and nature of the goods and present the recipient with that
seperate bill when the goods are delivered.

Sometimes the Gods smile on the little guy and a shipment, sometimes
even quite significant ones, will pass through customs without
attracting any duty or VAT.

:D

i.e. for all the complexity of different tax rates etc, you may only
need to record that a sale was to an overseas customer, i.e. local sales
tax exempt sale.


Ultimately what information you need to capture at the suppliers end I
imagine will come down to the accounting requirements of the company
itself, which in turn may be driven by local taxation and/or accounting
rules.

hth

--
Jolyon Smith
.

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