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TaxRobin
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Experience:  International tax
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We are a non-VAT registered partnership selling a motor yacht

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We are a non-VAT registered partnership selling a motor yacht to an Italian company. The sales agent in Majorca proposes to charge 21% VAT on his brokerage commission as he says it is an EU private sale. Is this correct?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
For cross border supplies of services, the ‘place of supply’ rules determine which tax jurisdiction is allowed to levy VAT.
The place of taxation is determined by where the services are supplied. This depends not only on the nature of the service supplied but also on the status of the customer receiving the service. A distinction must be made between a taxable person acting as such (a business acting in its business capacity) and a non-taxable person (a private individual who is the final consumer).
He does appear to be within the VAT rules as the sale is in Italy.
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Customer: replied 2 years ago.

None

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