Notes on invoices issued (Sales) to EU based customers (EC Sales List)

From the 1 Jan 2009, the University is statutorily required to report to HMRC on a calendar quarter basis, (i.e. 31 Mar, 30, Jun, etc.) details of all taxable sales made to customers that are based in the EU other than the UK. This quarterly return is known as the EC Sales List.

EU Taxable sales
Taxable sales are those sales that would attract VAT in the country that the customer belongs which may or may not be the same as a sale that would attract VAT in the UK. An example (as at Nov 2010) would be a supply of research between eligible bodies. Within the UK, this would be treated as exempt, but in Germany, the supply is treated at the German standard rate of VAT. Although, it is not possible for any of us (including the Tax Team) to know what is or is not taxable in each of the EU member states, assume that what is taxable in the UK will also be taxable in the EU. In these circumstances, the Tax Code to use on SAP at the invoice creation stage is A3. Any invoices that are issued to EU based customers that are not considered taxable will be picked up by the Tax Team and not reported. A full list of the member states of the EU is given at Paragraph 11.1 (Composition) of the Universitys VAT Guide at (http://www2.warwick.ac.uk/services/finance/vat/vat_guide/).

The EC Sales List and SAP

The details that are to be reported include the following:1. 2. 3. The Net amount charged The customers VAT Registration No. Whether the supplies are goods or services

The Tax Team through SAP is able to pick up items 1 and 3 fairly easily, but it is not able to pick up the customers VAT Reg. No. unless the information is already contained within SAP. As this is a crucial piece of information to complete the return, SAP will (from the 1 Jan 2009) not allow sales invoices to EU based customers (other than the UK) to be issued unless the customers VAT Reg. No. appears in the VAT Reg. No. field on SAP. This information is to be acquired from the customer by the person creating the invoice. Once received, the No. can be passed onto either the Accounts Receivables team or Tim Lyson-Marshall for SAP to be updated. Once SAP has been updated with the VAT No. the sales invoice creator will then be able to issue the invoice as desired. ---------------------------------------------------------------The following notes are to advise what to do if an EU based customer is not VAT registered; is an individual; the expected format of the customers VAT No. and the evidence that is acceptable for retention.

What if the EU based customer is not VAT registered or an individual?

Not all EU based customers will be VAT registered; e.g. because they do not qualify for VAT registration; are below the de minimis limit for VAT registration; not in business or are individuals. In these circumstances, the Customer VAT Status 3 (EU non-VAT registered) on the Amend/Create Customer Master form should be circled/highlighted when forwarded to Accounts Receivable. This will allow SAP to issue invoices without the need of a Customers VAT Reg. No.

Please note that this should not be used if the customer's VAT Reg. No. is not available. The Tax Team makes regular and stringent checks on invoices issued to EU based customers and any that do not have a customers VAT No. maybe liable for UK VAT and debited to the relevant departments/faculty accounts. Please refer to the Tax team if you should have any queries.

What format should the customers VAT Reg. No be in?

SAP will only accept VAT Reg. Nos. in the format of the country that the customer is resident. To begin with, all VAT Nos. will be preceded by the two letters of the customer's country; e.g. FR France, DE Germany, etc. After that there will be characters of any number of both alpha and numeric consistent with the customer's country. France has 11 characters with a mixture of alpha and numeric characters. Germany, on the other hand, consists of just 9 characters, all of them numeric. For full details of each countrys format, please refer to the following webpage. http://www.hmrc.gov.uk/vat/managing/international/esl/country-codes.htm This information is also available at Paragraph 11.1 (Composition) of the Universitys VAT Guide at (http://www2.warwick.ac.uk/services/finance/vat/vat_guide/).

What evidence of the EU customers VAT No. can be accepted?

It is acceptable to have VAT Reg. No. notifications by e-mail or letter. Telephone notifications would only be acceptable if backed up in writing at a later date. If in any doubt about the validity of a particular VAT No., the following website allows it to be confirmed or otherwise. Please note however that it only confirms the validity of the number. It does not advise of the name to whom the Reg. No. belongs. You will need to know the Universitys VAT Reg. No. when accessing the site and this is GB 545270058. http://ec.europa.eu/taxation_customs/vies/vieshome.do If you should have any queries at all, please contact Tim Lyson-Marshall, Tax Team, Finance Office (extension 28900 or email T.Lyson-Marshall@warwick.ac.uk)