VAT, REVERSE VAT, WHAT VAT? Hongkong/Germany

[Overtrade]

Simple situation:

A company from Hong Kong sells a consulting service to a company in the EU, Germany, which is registered for VAT.

Who pays VAT, where is it paid, and is it paid at all?

 

[Nomado]

If the german company has a VAT number, then no vat is charged by the hk company. But the german company has to pay it (german vat rate) to the german gouverment (reverse-charge mechanism).

If the german company did not have a vat identification number, hk should charge german vat on the invoice.

 

[6squared]

If you receive services for business purposes from a supplier based outside the EU, you should usually pay VAT at the applicable rate in your country, as if you had supplied the service yourself (using the reverse charge procedure).