How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4783
Type Your Tax Question Here...
bigduckontax is online now

Hello I am a UK based auctioneer and have been asked to sell

This answer was rated:

Hello I am a UK based auctioneer and have been asked to sell the assets of a company located in Romania.
The auction will be for the business premises and assets only (not a going concern)
Is the offer price of potential bidders subject to VAT either UK or Romanian?
Hello Mark, I'm Keith and happy to help you with your question.
As far as I can see this would appear to be an exempt supply under the Romanian VAT regime. Price Waterhouse Coopers have the following advice:
'The sale of real estate property (except for the sale of new buildings or building land) is also treated as VAT-exempt operation without deduction right. If the exemption is not favourable (ie the initial input VAT can become a cost in wjole or in part), VAT-registered persons can opt to tax suck operations, based on a notification filed with the tax authorities.'
Brighton and Hove Accountants advice:
'Services relating to land or property include estate agency, conveyancing, architects, surveying, construction, property maintenance and repair work, hotel accommodation (unless a tour operator), defined exhibition stands, and property management services. If the property is in the UK, the service is liable to UK VAT regardless of the status or location of the customer. If the property is in Romania, the service is outside the scope of UK VAT regardless of the status or location of the customer.'
So it would appear that as far as your books are concerned no VAT is applicable and for the company the sale is an exempt supply under the Romanian VAT regime.
I do hope I have been able to shed some light on your question.
bigduckontax and other Tax Specialists are ready to help you
Thank you for your support.
Customer: replied 3 years ago.

Thank you Keith that was most helpful.

I am presuming that I should charge VAT on the buyers commission charged on the sale given its a service provided here in the UK



That was my initial thought Mark, but then Brighton and Accountants produced that gem that as the property was located in Romania the transaction was outside the scope of VAT. I have only come across 'outside scope' before when an organisation with which I was connected received donations and legacies and HM Customs and Excise, as they were then, advised that such transactions were outside the scope of VAT.