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bigduckontax, Accountant
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A UK company (supplier) provides access to a commercial database

Customer Question

A UK company (supplier) provides access to a commercial database to a subsidiary of my UK company that is based in India. The Indian company is sub-contracted by my company to provide services to clients based in the UK. We have decided that it is best for the supplier company to invoice my company directly in the UK for the database services. Should the supplier charge VAT to my company on their invoice, even though the database is being accessed in India?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
I would suggest that the commercial database access organisation is in essence providing services to India, an export, and thus making a zero rated supply. However, if the supplier is charging you VAT I see no problem as for you it is merely another input and input VAT is reclaimable by you on your quarterly return in any event in any event.
I do hope I have set your mind at rest over this conundrum.
Customer: replied 2 years ago.

Thanks Keith. Actually they didn't charge us, so they obviously know what they are doing!

Expert:  bigduckontax replied 2 years ago.
Excellent, problem solved!
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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