Global Indirect Tax Community

Share knowledge, ask questions,
find answers and explore popular topics.

Activity Feed Forums EU Member States France VAT treatment on expenses recharges between two EU entities

  • VAT treatment on expenses recharges between two EU entities

    Posted by Santosh on 25 August 2023 at 2:05 pm

    Hello Community! Can someone help with the VAT treatment determination in Europe for expense recharges between two intra entities? Situation: Entity A (French) is paying the expense bill related to Entity X (German) and supplier is based out of France charging 20% French VAT. Later, via Intercompany Entity A (France) wants to recharge to Entity X (German). What should the VAT treatment for transaction?

    Audrey replied 6 months, 1 week ago 2 Members · 1 Reply
  • 1 Reply
  • Audrey

    Member
    28 August 2023 at 2:16 pm

    As the French company is buying the service in its own name and is invoiced directly by a local service provider, it should be entitled to recover the corresponding VAT on the basis that the expense is to be subsequently recharged in full. The invoice for the services recharged in full to the German entity should be treated a subject to reverse charge German VAT (I.e. only the net amount to be recharged by the French entity).

    Hopefully this answers your question.

Log in to reply.