For Guya - RE VAT

Technical topics regarding tax preparation.
#1
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One of my client's buys a product from a vendor in Spain. The vendor has asked my client to provide a VAT/NIF number for their taxes. I know what VAT is, but what is NIF? How would it be used in their taxes? We're not sure if they are asking for something like a sales tax, or in Hawaii, the GET number, or if it would even be appropriate for their vendor. Any thoughts as to the best response?
 

#2
Nilodop  
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I'm not Guya, but here is what NIF is. http://www.agenciatributaria.es/AEAT.in ... _IVA.shtml
 

#3
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Thanks for the link, Len. After reading that, my next question would be, is my client required to apply for an NIF number? Their purchase was small, most likely isolated and not a continuing order.
 

#4
Nilodop  
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Wait for Guya.
 

#5
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Are they trying to charge your client VAT? If so, why?
 

#6
Guya  
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Hi no idea - honestly. I pay lots of VAT but don't claim to advise on it...
 

#7
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Thanks Guya. Sumwonlost, no, the client has received a letter asking for their VAT/NIF number "...for our taxes". It sounds a lot like being asked for a resale number, but the client doesn't have the number and I can't tell from the link provided by Len, if they should apply for it. It seems like a complicated process for a nominal sale.
 

#8
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Well, I know enough about VAT to be dangerous. Although each EU country has some different rules on what is taxable (and at what rates) and what is not, the basic principles are the same throughout the EU. So, if someone is selling from the EU to a business in Hawaii, it is, on its face, exempt from VAT and that should be the end of the matter. Their query may be to do with their own due diligence. One can, for instance, sell product outside the EU then smuggle it back in. Why anyone would wish to use Hawaii for that is beyond me.

Is there any possibility that the Spanish business sold your client something that can be used as a component of something else, which ends up getting reimported to the EU? It's just an educated guess but I think that may give you some sort of reporting requirement.

The short answer is that someone from outside the EU who buys from inside the EU, and who is the end-user of the product, does not need to be registered for VAT and does not need any form of tax ID from an EU tax agency. So tell them that and see what they come back with.
 

#9
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I'm not sure of the answer Sumwunlost. From what you are saying, I think this is an exempt transaction. The client is a chocolate factory and bought a conche, which is a piece of equipment I believe, from them. She is going to let the vendor know that they don't have the number they are requesting and we'll go from there. Thanks for the help.
 


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