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Thread: Is VAT applicable in Australia?
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27th Dec 2010, 07:01 PM #1Product designer retired
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Is VAT applicable in Australia?
I am about to purchase a VFD from the UK, and according to the seller, 17.5% VAT is included in the sale price.
Is this a legitimate tax?
I have tried to contact the seller on numerous occasions, with no response.
Ken
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27th Dec 2010, 07:05 PM #2
Ken, VAT is not applicable on sales to Australia from the UK.
I have always had the VAT taken out of the price when purchasing goods from the UK.
However, if you "have contacted the seller on numerous occasions without a response", then you have bigger problems than VAT.
Personally I would be very wary of dealing with a company that doesn't reply to enquiries.
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27th Dec 2010, 07:43 PM #3Most Valued Member
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On the few occasions I have enquired about UK purchases, they have always wanted to charge VAT.
Nev
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27th Dec 2010, 07:50 PM #4Product designer retired
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Hi BS,
I take your point, however I'm sort of buggered, the UK seller is the only one that has the type of VFD I require. Very interesting that you say no 17.5% VAT into Australia. Is there a Government site that spells this out?
If and when I do get in contact with "Direct Drives", I might need some ammo to substantiate my claim.
Ken
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27th Dec 2010, 07:59 PM #5
Ken, I am certainly no expert on VAT in the UK
The main company I deal with in the UK is Chronos. If you look at their website, you will see they charge 17.5% VAT on sales to EU countries only. I have bought one of their ER collet chucks and they charged me the ex-VAT price.
If you can't communicate with a company, it is very difficult (if not impossible) to do business with them. Even if you succeeded in buying from the, what happens if something goes wrong?
Edit: Likewise if a company in Australia sends goods overseas/exports, there is no GST payable on that AFAIK.
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27th Dec 2010, 08:26 PM #6
Ahhhh, English bureaucracy. Why use 50 words when you can use 500...
HM Revenue & Customs
In particular (my emphasis):
2.2 Why does zero-rating apply to exports?You might need to remind them that you are in Australia, not Austria. In para 2.9, we are "All other countries which do not appear in paragraph 2.8."
VAT is a tax levied on goods and services consumed in the EC. When goods are exported they are "consumed" outside the EC and to impose VAT on such goods would be contrary to the purpose of the tax. Therefore, the supply of exported goods is zero-rated provided certain conditions are met.
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27th Dec 2010, 08:31 PM #7Mechanical Butcher
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Sad but true, some sellers take a somewhat arrogant view when dealing with overseas orders, reinforced by the unlikelihood you'll turn up on their doorstep to complain. Have you checked out the UK Inland Revenue website for info on VAT? Must be spelt out there. I think you'll find that it's a local consumption tax, not payable on exports (except to EU?). There's a bit of paperwork involved to arrange exemption, so it might be the order clerks just find it a bit tedious and like to avoid it if they aren't particularly interested in the sale. The government is in on it too - if you are visiting from overseas you're expected to pay the VAT, then find the HM Customs counter when you leave Heathrow, find your receipts, fill in forms and whatever other hurdles, before they deign to allow a refund if you're lucky. If you've talked yourself into thinking they've got something special, I suggest you just wait and cool down a bit! Several companies mass produce these gadgets don't they? Someone else must have one that'll suit.
I've taken the plunge and ordered an Oz made rotary phase converter rather than try to make one, lazy sod that I am. Wanna wait for my report on how successful it is?
Jordan
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27th Dec 2010, 08:38 PM #8Dave J Guest
I have never been charged VAT on anything I have bought from over their. I am almost positive it only applies if you live over their.
Dave
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27th Dec 2010, 08:57 PM #9Product designer retired
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Thanks guys,
I Googled this subject, and came away virtually empty handed. MS, that's a great start to get some ammo.
My tax question above is a follow up to my quest to find a 240V 1-phase to 415V 3-phase inverter.
Drives Direct UK is the only company I could find with this 2-stage VFD by Teco Westinghouse. If it was available somewhere else, I'd be happy.
Ken
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27th Dec 2010, 08:58 PM #10Novice
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With regard to documentation if the shipping address is located outside the eurozone and the goods are going directly from the supplier to the overseas customer they just put the delivery address on the invoice - no other documentation required - its zero rated. Its not like they have to fill out additional tax forms and lodge them.
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27th Dec 2010, 09:03 PM #11
Ken, Teco is one of the biggest manufacturers of VFDs, surely there are other suppliers of this unit?
Have you Googled the Teco model no?
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27th Dec 2010, 09:19 PM #12Product designer retired
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BigShed,
Yeh, been down that road and drew a blank. Even sent Teco an email to no avail, in fact, no reply.
Stustoys also purchase one of their units and tells me the part No. is MSD-403-H3F. His unit is a 3HP one. The one I'm after is only 1HP. Stu tells me he had to pay the 17.5% VAT, despite emailing Drives Direct. Perhaps Stu could fill us in on the full story.
I smell a rat with this tax. Below is from their eBay store listing.
All NEW products from Drives Direct(Inverters) LTD come with a 1 year return to base warranty, Please email for more information if a EXTENDED COVER is required on any item, ALL PRICES SHOWN INCLUDE VAT at 17.5%, You do not automatically get a seperate VAT invoice for items purchased via EBAY as your EBAY invoice shows that VAT is included in the total. If you require a VAT invoice please call 01773 811038 and pay us direct via card payments and we will be able to supply you one.
Ken
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27th Dec 2010, 09:24 PM #13
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27th Dec 2010, 09:28 PM #14Product designer retired
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Hi Big Shed,
That unit is not 240V in to 415V out.
It seems that Drives Direct must rework a standard Teco unit, can't think of any other explanation.
Ken
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27th Dec 2010, 09:38 PM #15Most Valued Member
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It seems Direct Drives either rework them(doubtful in my option) or have found out that the 415V version doesnt care if it is run on 240V(more likely in my option). But I dont know for sure either way