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A UK-based supplier is selling car parts, purchased from a manufacturer in Hungary, to a customer in South Africa. The Hungarian firm is insisting that it should charge 27% VAT
I have a UK-based client who is selling car parts to a retailer in South Africa. The goods are being bought from a supplier in Hungary and the supplier is arranging for the goods to be shipped directly from Hungary to South Africa.
The only problem (a big one) is that the Hungarian supplier is insisting on a 27% VAT charge to my client because my client’s business is based in the EU. Is this correct?
I have heard from a colleague with a little of knowledge on EU VAT issues that this is a quirk that is evident in some eastern European countries and that the solution is for my client to get a Hungarian VAT number to reclaim input tax on a Hungarian VAT return.
He can then zero-rate his onward sale because he now has a contract with a non-EU customer ie the retailer in South...
