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Surprise German VAT?


BlueShift

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Hi Guys,

 

Bit of a random question this one - just popped up on a tour I'm PMing.

 

Basically, its a band tour through europe. Various countries, mostly in the EU. The tour consists of 25 people, 2 large tour buses with trailers of production equipment. I've covered all the normal bases: Carnet's are sorted, stuff is insured, etc..

 

However, I've just booked the transport and the bus company are telling me that they have been stopped by German officials while in Germany and asked to pay german VAT: (copy of the portion of the email I was sent)

 

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We (coach companies) keep getting our coaches stopped in Germany for VAT inspections.

 

In Germany, you as the coach hirer are required to declare and pay VAT for the distance and passengers travelling in Germany. If our drivers are stopped they will show a combination of documents declaring you as the hirer of the coach because due to the nature of the German VAT rules, the coach company is exempt from collecting VAT (16%) where the coach is hired as a whole, but the hirer is required to declare and pay it independently. This applies to all coach companies.

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I'm not sure exactly what the above means in terms of an amount payable. The bus company havent been able to enlighten me. If its 16% VAT on the portion of the bus hire that takes place in German borders, then thats a couple of grand, and seems random since I've already paid UK VAT (an EU country) on the entire amount of the hire.

 

Has anyone here done work in Germany and might be able to advise me on what this involves?

 

Thanks,

 

Chris

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google "german vat coach transport"

 

 

On January 1st 2005 a new regulation was introduced by the German government. All UK coaches circulating in Germany must be registered for VAT and carry a certified original copy of their VAT certificate. Failure to provide the necessary document on demand can result in delays, inevitable fines as high as 5000 Euros and even seizure of the vehicle until the fine is paid. Operators should arrange certification through the German Tax Office at Hannover Nord, Vahrenvalder Strasse 206, 30001 Germany. Telephone 00 49 511 6790 6390. Drivers setting out for Germany make sure you are carrying the original certified copy. Photocopies will not do. Operators should obtain enough certified copies to cover their European touring fleet.
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From 1st January, 2010, cross-border VAT rules changed. I don't travel abroad for work so know little about this particular topic.

 

I do know that the PSA has a transport group which works out solutions to these problems and maybe joining the association could actually be cost-effective for the OP. I am a member so am biased but it seems sensible to avail oneself of an existing solution worked out by experts. www.psa.org.uk Give the GM a call and maybe join up?

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I think a call to the VAT office is in order.

 

I obviously have no problem with whatever legislation or costs there are associated with this - its part of the cost of doing business.

 

What I have a problem with is a coach company trying to have me accept liability for this without being able to tell me how much I am liable for and how this might affect my travels.

 

The other potential issue, which is actually a far greater concern that having to write a cheque, is the potential for being held for a few hours causing us to miss load-in or even an event.

 

Thanks for all the posts so far, keep them coming!

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not really a helpful answer I am afraid, but if I was booking a tour that went through germany, I would expect the tour transport provider to advise me, I would expect the coach company/tour bus company to know these things and be able to tell you more accurately.

 

if I book a truck to take gear to a job in germany, I would expect the price from the trucking company to include all tolls and taxes, I wouldn't expect a bill when the gear gets back for 16% of the extra fuel used when travelling on the autobahn or some other random tax...

 

I would push the transport company for more information.

 

 

p.

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Operators should arrange certification through the German Tax Office at Hannover Nord, Vahrenvalder Strasse 206, 30001 Germany

 

Looks to me like it's all down to the bussing company... based on that quotation there, I'd tell them to shove it where the sun don't shine and get their house in order before asking me to cough up more cash because they are unaware of the legislation that applies to their particular segment of the business.

 

Cheers

 

Smiffy

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Operators should arrange certification through the German Tax Office at Hannover Nord, Vahrenvalder Strasse 206, 30001 Germany

 

Looks to me like it's all down to the bussing company... based on that quotation there, I'd tell them to shove it where the sun don't shine and get their house in order before asking me to cough up more cash because they are unaware of the legislation that applies to their particular segment of the business.

 

Cheers

 

Smiffy

 

I agree,

Apparantly though there is some loophole in the German regs that say that if the coach is hired entirely by a single person - ie, this isnt a typical coach operator ferrying passengers, but is infact a private hire, then the hirer is the one liable for the charges.

 

I'm going to go back to the bus company and get some more info.

 

I was hoping that someone here might know the nature of the charge and what it specifically relates to.

 

Thanks

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If the coach operator is VAT registered, then I'm not sure what purpose the certified VAT certificate serves. VAT is levied on services paid for in the UK - in this case, if you pay XYZ coaches for a two week hire, then it's a UK transaction between two UK businesses. Taking the coach to Germany doesn't generate any charges made whilst in their country. If the company charged you £1000 for England, Germany and France with a third in each - there's no way of splitting this into an accurate chunk for one country?

 

I can't find anything in my own VAT information that suggests 'extra' VAT is levied in another country.

 

Carnets are different because they deal with importing and exporting temporarily - but how does this apply to coach travel? I don't see old biddies complaining about being charged for VAT on their Saga Holidays when they pass though Germany?

 

EDIT

Damn it, they're actually doing it just like I said.

Example 1: You charge 20 passengers £200 for a trip to Cologne. £100 is transportation cost (the rest is cost

to you, i.e. hotel charges, entrance fees, city tours, etc.)

20 passengers * £100 = transportation fee total: £2000

• German portion: The km travelled in total between the UK and Cologne are 500. Only 70 are travelled in

Germany. This would mean that only 14% of the £2000 is the transportation fee for Germany, i.e. £280.

• Convert this figure into Euro, £280 = Euro 448,-. To simplify this example the exchange rate is set at £1

= Euro 1,6 (but please check with your bank for current rate).

• Divide Euro 448 by 1.16 (16 % German VAT) to arrive at your net turnover, i.e. Euro 386. Transfer this to

the official German “Umsatzsteuer Voranmeldung” No 51 - left hand column.

• The difference between gross and net sum, here Euro 448 and Euro 386 is the VAT payable = Euro 62.

 

 

That's a bummer! Maybe then it's Free Coach Travel - you only hire the driver?

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Thats what I figured - what a ridiculous system!

 

I would understand if this were a non-EU country, but I have already paid some EU VAT on this transaction. Cheeky!...

 

Unfortunately that sum works out to be nearly £2k in VAT payable for this trip which is a complete bugger.

 

I can assign this cost to some promoters, but they wont be happy about it!

 

According to the bus company, I can draw up a contract with the promoters stating that they will be responsible for any VAT payable and the Germans will just send them a bill. However, this is complex and with multiple promoters will just be an administration headache.

 

Whats more is, I will need to pay this on demand or be held until the fee is paid, which means to avoid missing an event, I need to carry €2500 in cash just in case...

 

rubbish!

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Obviously, you've already booked your coaches, but for future reference, could this have been gotten round by booking a German coach service for the tour, and not a UK one?

 

Possibly, although obviously life is more complicated than that. If I hired a german coach company (coachservice.com are great!) I'd have to pay to get the coach to london to start the tour and then back to germany at the end of the tour which adds 2 days and 1000 miles to the hire, so its horses for courses.

 

Ive done plenty of bus tours, but never been through D since the VAT rules changed... annoying.

 

Such is life...

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Can you not then claim that VAT back from UK customs as it has been paid in another EU country and should not be paid twice?

More particularly should not the coach company be charging you UK vat ONLY on the proportion of the fee NOT being paid for travel in Germany?

 

Regards, Dan.

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Can you not then claim that VAT back from UK customs as it has been paid in another EU country and should not be paid twice?

More particularly should not the coach company be charging you UK vat ONLY on the proportion of the fee NOT being paid for travel in Germany?

 

Regards, Dan.

 

This is what I was thinking.... You should only have to fork out an extra 1.5% (German VAT is 19%) in tax on the proportion of the transport which is in Germany. No way you should have to pay the whole lot again. And if £2K makes up 1.5% then you're paying £133K for coach travel. Which seems a lot but could be possible I suppose...

 

The coach company would then have to charge you VAT in the bits they supplied outside of Germany and count the services they provided you in Germany as an EU-export I should imagine.

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