Why do some airports demand a VAT number to sell you avgas?

gallois wrote:

Exactly how you reclaim and who from I don’t know I just remember a news article about how many Brits don’t know about this and how much is never reclaimed.

It might be VAT refund for visitors to EU? Summarised:

1. Ask if the shop follows this scheme
2. Show proof of non-EU residency
3. Complete reclaim form
4. Get form and invoice stamped by customs when exiting the EU
5. Send off form for reclaim

Payment may be on the spot in the airport, through an intermediary agent, or direct from the shop, and is probably subject to a commission or handling charge. I think it’s aimed at luxury goods, e.g. Louis Vuitton, so of little use to GA.

Peter wrote:

talking B2B here, not retail

Well, “B2B” is a more colloquial and less-well defined term that is mostly equivalent to “customer is VAT-taxable trader”.

Peter wrote:

This has not changed in that we invoice him with zero VAT in all cases

That is because you don’t provide services that fall under one of the exceptions. If you were e.g. to serve sell him a meal while physically in the UK (restaurant business) or charge for accommodation (hotel business) you would charge the British VAT even in a B2B case.

And pre-Brexit or post-Brexit, if you sell to a German company goods that stay in the UK (not transported out of the UK, neither by you nor by customer nor on your behalf nor on behalf of customer), you would charge them UK VAT, right? (If you don’t, I firmly recommend that you change this policy.)

Peter wrote:

what a Spanish business is doing asking for a UK VAT #, I don’t understand at all

It may just be inertia not having adapted to Brexit. However, again, the fact that you have a UK VAT number can very well be considered as prima facie evidence that this is, in your words, a B2B transaction (in the words of the VAT law: supply of services to a VAT trader acting as such). And your incapacity to provide a UK VAT number as a strong suspicion that this is (in VAT terms) B2C transaction, notwithstanding the fact that the customer is a company, where “B2C” in VAT terms is a more colloquial and less-well defined version of “customer is not a VAT-taxable trader acting as such”.

gallois wrote:

I assume that you pay the fuel +VAT and if you are from the UK you claim it back and if you give a VAT number they don’t charge it in the first place.

No. Just like if you buy fuel in Spain when being in a car in Spain, you can’t reclaim the VAT on it just because you are a UK, or BW, or US, or CA, or TH (Thailand) tourist. Same, even if you have a VAT number, you cannot get the fuel station not to charge you Spanish VAT.

That is because essentially fuel supply is not supply of a service, it is supply of goods. So the rules I gave above (which are over-simplified as “no VAT if you give a foreign VAT number”) DO NOT APPLY AT ALL. The VAT of the place of supply apples, punto basta.

Now, you tell me, British Airways or United Airlines (US airline) do not pay VAT on their fuel. That comes from a completely different reason, not the general rules of VAT. That is because fuel supply to an airline that make essentially (only) international transport for reward by air is exempt for VAT by a special exemption just for commercial air transport. E.g. if Paul Allen or Donal Trump fly their private jet into the EU for personal reasons, they will pay VAT on the fuel they buy in the EU. If Microsoft or the Trump Organisation fly their corporate jet into the EU for business reason (other than transport of passenger or cargo for reward, e.g. for a business meeting of Satya Nadella or Eric Trump in the EU) they will pay VAT on the fuel they buy in the EU. Reclaim of that VAT is possible or not according to the same rules as any other purchase.

But, if Microsoft has a subsidiary that operates their “corporate jet” under an AOC and that bills Microsoft Inc for the passenger transport of Satya Nadella, and the activity of that subsidiary is chiefly on interational routes (not intra-US transport…), then yes, that subsidiary will not pay VAT on the fuel it buys in the EU, and yes, the cost of that fuel is included in the Satya Nadella transport ticket that is billed to Microsoft Inc

Peter wrote:

Edit: EU is https://ec.europa.eu/taxation_customs/vies/#/vat-validation

Presumably that one is of no use to UK businesses anymore.

I’m not aware that UK VAT law has substantially changed since before Brexit, just “EU + assorted territories including Isle of Man & Gibraltar” is replaced by “UK + Isle of Man + Gibraltar”. So I’d say that presumably that website is useful for UK businesses, it shows that they have done their research in verifying that their customer is a VAT-taxable person/trader. But they don’t anymore have the obligation to rat them out to their respective VAT tax offices.

Peter wrote:

I gave them my full company name address and VAT number. Then they didn’t charge the Spanish VAT. That saved ~20%. Obviously I paid for it with my own money; it wasn’t a business related flight.

The funny thing is that this is the correct procedure for non EU export anyway regardless of whether the customer gives you a VAT number or not. Post-brexit, a UK VAT number is meaningless to a Spanish supplier because the EU VAT system is now decoupled from the UK VAT system, in the same way it is obviously decoupled from a VAT system in say Botswana.

No. The deemed place of supply of services for the application of VAT rules is (with some exceptions) the same for EU customer or non-EU customer. The general rule is:

1. If the customer is not a VAT-taxable person/trader, then the place of supply of services is the place where the provider has its seat of economic activity from which the service is provided.
2. If the customer is a VAT-taxable person/trader, then the place of supply of services is the place where the customer has its seat of economic activity to which the service is provided.
3. For application of these rules, a VAT-identified person is considered as VAT-taxable/trader for all services it receives when acting as such.
4. “VAT-taxable person/trader” doesn’t mean taxable to EU VAT per se, it means having an economic activity of the kind that is, as per EU rules, within scope of VAT, disregarding the territoriality of the tax. The activity can even be zero-rated for VAT, as long as it is in scope of the tax.

So for a Spanish provider (VAT-taxable person/trader) whether your customer is UK or NL or BW (Botswana) doesn’t make a difference in theory:

• If your customer is a British / Dutch / Botswanan resident person not acting as a business (e.g. a tourist visiting Spain and acting for purely private purposes), then Spanish VAT applies to the services you provide to that person.
• If your customer is a British / Dutch / Botswanan that has an economic activity (in UK / NL / BW or elsewhere, but not in Spain) of the kind that falls in scope of EU VAT when it is done in the EU, and your services are given in furtherance of their economic activity, then the place of supply is UK / NL / BW or elsewhere, and the service falls outside of the territorial application of Spanish VAT, that is there is no Spanish VAT on it. In the NL (more generally EU) case, you have the obligation to rat them out to their VAT tax office (via your own VAT tax office) so that their VAT tax office can check that they self-declare the VAT on that service. In the case of NL (more generally EU), having an NL VAT number is a prima facie evidence that they do have an economic activity of the kind that falls in scope of EU VAT; in the non-EU case, you theoretically have to do your analysis from other elements; I’d say that for the UK or IL case (countries that do have a VAT system that is not an EU VAT), having an UK/IL “local” VAT number is a good prima facie evidence in practice, too.

There are a few subtleties in the words above that people not used to the system will not necessarily understand from the words above, e.g. an individual that has a “VAT kind” economic activity as an individual is considered as VAT-taxable person for their business activity, but not for their personal life. That is the “when acting as such” part.

Now, enter the exceptions to this general rule, here are a few examples:

1. Hotel, restaurant, … the deemed place of supply is the actual place of supply, that is the physical location of the hotel or restaurant
2. Short-term rent of a vehicle to a non-VAT taxable person: the deemed place is where the customer took short-term temporary possession of the vehicle
3. Long-term rent of a vehicle to a non-VAT taxable person: the deemed place is where the customer has his/her usual place of residence
4. Electronic services provided to non-EU non-VAT taxable persons: the deemed place is where the customer has his/her usual place of residence
5. Transport of passengers: the deemed place of supply is the place where the transport happens, prorated over the actual distance covered
6. Entrance ticket to event: actual location of the event

AIUI UK visitors can now reclaim the VAT they have paid in any EU country on any item.
Spain always asked for a VAT number for GA fuel even before the UK left the EU VAT system.
I can only assume they have just kept that going but what on earth you do if you don’t have a VAT number I don’t know.
I assume that you pay the fuel +VAT and if you are from the UK you claim it back and if you give a VAT number they don’t charge it in the first place.
Exactly how you reclaim and who from I don’t know I just remember a news article about how many Brits don’t know about this and how much is never reclaimed.

Peter wrote:

UK HMRC will have to set up their own validation website

Ta da: https://www.tax.service.gov.uk/check-vat-number/enter-vat-details

Edit: EU is https://ec.europa.eu/taxation_customs/vies/#/vat-validation