VAT Q&A for U.K. Partners and Customers

What is Cisco International?

Over the next few years, Cisco is building capabilities to deliver products, services and software with a more global focus.
A first step towards this is transitioning most of our European partners and customers to a new company, Cisco International Limited, on 30 August 2009.

Beginning 30 August, 2009, Cisco International Limited will include 34 EU countries and Israel (EU includes UK, 24 EU countries, 4 European Free Trade Association countries, and 5 Principalities; not Italy nor The Netherlands).
This new company will allow us greater flexibility to work with partners and customers.

What is VAT and what is the change to VAT?

Services purchased from CIL by partners and customers located in (bill-to) the United Kingdom will now be invoiced with U.K. Value Added Tax (VAT); previously, a reverse charge would have applied.

For services purchased by non-United Kingdom partners and customers, the VAT treatment will remain as is.

The U.K. VAT number (GB 938 8565 62) will be used for all UK procurement (so local purchases in UK of goods that remain within the UK, such as office equipment, and services). This UK VAT-id number will also be used on remittance invoices and invoices forservices.
Who is impacted by VAT

All countries in the U.K. territory (Wales, Ireland, etc) are currently aligned to BV. After 30 August 2009, all U.K. customers will be aligned with CIL. All customers that are located in the U.K. territory are impacted.

What about Zero Rated Agreements?
The name of the Agreement will have to change assuming that the zero-rated agreement is not assignable to CIL. Zero rate agreements that arenot assignable will come to an end, and a new agreement will be raised with CIL.
In what currency will VAT be calculated?
VAT is calculated based on the invoice’s transactional currency (GBP, USD, EUR). VAT is also reflected onthe remittance invoice,based on time of invoicing generation, andon the daily exchange rate for that day.
VAT is captured in both the invoice’s currency as well as in pounds sterling. The invoice will display the Invoice “Net amount in Pound Sterling”, “VAT amount in Pound Sterling”, “Total amount in Pound Sterling” and the “Conversion rate used for United Kingdom” as well as in the invoice’s transactional currency.
If quote is in USD, will VAT be in USD or GBP?
Thisprocess does not change after 30 August 2009. For invoice purposes, a USD-based quote wouldshow VATin both United States Dollar (USD) and Pound Sterling (GBP), as it is done today. For quoting purposes, the transactional currency depends on whether the customer is a U.S. based customer (USD) or a U.K. based customer(GBP). The quoting currency will not change for U.S. customers, they will see a USD based invoice. However, for VAT purposes there is a conversion feature on the invoice that converts the VAT to local currency.
How will exchange rates be handled?
There is a conversion featurethat willconvert the VAT to local currency.
What is the VAT Number?
All the VAT numbers for the CIL entity should be available by end of July.
What is the VAT rate?
The VAT Rate will be the Standard Rate paid on most goods and services in the UK, which is currently 15 percent. The standard rate will increase to 17.5 percent on 1 January 2010.

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