1. Home
  2. Taxes General Forum
  3. VAT Required?

VAT Required?

Client is a US-based artist. Client is about to enter into a transaction to sell three pieces to Netherlands resident. Sales price might be about $140k US. Historically, sales have gone through galleries who handle these issues.

Does Client have an obligation to collect (and pay) VAT? If so, how does Client remit it? Where? Is 20% the correct rate?

If there is no obligation to collect (or pay) VAT, why? I'd like to put it in my file and have Client retain a copy in their file in case the matter comes up.

It looks like there may be a registration requirement if sales exceed $85k euro. If this is true, can Client avoid registration be entering into three separate transactions for the three pieces? Or is this going to trigger some version of "structuring"?

What other things should I be worried about?

Reply to
bc
Loading thread data ...

According to bc snipped-for-privacy@ix.netcom.com>:

How is the client planning to deliver the paintings? If the buyer comes to the US and takes them home, the VAT is the buyer's problem. If your client is planning to ship them or take them himself, the VAT is your client's problem, because the paintings aren't going to get out of customs until the VAT is paid. If the purchaser is a Dutch business there is a provision for reverse-charging VAT but it doesn't sound like that is the situation here.

Given the size of the sale, I would suggest finding a customs agent that understands this stuff. It won't be free, but it's better than getting $140K of art stuck in customs. I don't know whether your client will have to register for Dutch VAT but if he does, it's a bunch of paperwork but it's not expensive. It might be a good idea if he expects to sell art to other people in the EU since he should be able to use a Dutch VAT account to import anywhere in the EU.

By the way, I think the VAT on fine art is 9% but the customs agent would know that.

Reply to
John Levine

Client shipped the art to the Netherlands as "presentation materials" because he was intending to show them, not sell them.

I saw a note about that, yesterday evening.

I have a call scheduled with an Avalara representative tomorrow morning. Perhaps he will finally be able to shed the necessary light on what to do now.

Reply to
bc

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.