Stop Paying EU VAT for Online Purchases
Do you buy supplies and use services online for your business? Do you order your supplies from Amazon, or share your files with your team on DropBox? We all do these days, but are you aware that in doing so you are most likely paying European VAT on them, and this cannot be reclaimed through you regular VAT return? This means your business is paying the full, gross amount and depending on your circumstances, that could be a big cost.
Luckily, it is easy to avoid this with most vendors, by simply entering your VAT number in your account.
We’ve listed a few vendors below that we checked out, but you should go through your own purchases to see if you can identify other vendors you regularly buy from. Then search for adding VAT ID on their website and you should find the information you need.
- Amazon – Make sure all your purchases are business related, set up a free business account if it’s easier, then simply add the VAT ID
- Adobe – Just add the ID
- Dropbox – Just add the ID
Once you have this set up, you need to make sure you tag each purchase as VAT Reverse Charge in Xero. Your invoice will show no value added tax , but the invoice should show
- Your ID number
- The VAT rate
- A statement confirming it as an EU Reverse Charge Purchase
That’s all there is to it! If you have any questions, just let us know and we will do our best to help!