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Rates including VAT or not?
Thread poster: Red Cat Studios

Red Cat Studios
United Kingdom
Local time: 21:19
Member (2002)
English to French
+ ...
Sep 6, 2002

It\'s all about giving a rate when bidding for a job: should this rate include VAT or not?



In countries like UK the custom is to include VAT in a price. In countries like US often a price quoted is free of tax, VAT being added on top.



I\'ve worked recently for a UK agency who offered me a fixed price for the job done. As I am a UK resident I took this price as being VAT inclusive, therefore when I send them my invoice I put \"Total payable\" the price given in the first place. But, as I didn\'t show the VAT split (promissing to issue a VAT invoice after receiving the full payment), the agency\'s accountant got back to me asking me if the price indicated in my invoice was including VAT or not? All of a sudden, something that was obvious to me became uncertain. I just realised I wasn\'t so sure if there was a unique practice about VAT or different ones from one customer to another.



Any opinions about this matter?


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Parrot  Identity Verified
Spain
Local time: 22:19
Member (2002)
Spanish to English
+ ...
Between countries you don't collect VAT Sep 6, 2002

so I find it pointless to include it in a bid price outside of the country you work in. As far as I know, Central Europe quotes without VAT, even internally, and US/Can translators are not expected to quote it either, but I may be wrong (I haven\'t worked from INSIDE the US/Can).



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thierry2
English to French
+ ...
not included Sep 7, 2002

If you are to collect VAT, that means you are a business. Rates and prices between businesses are usually taxes (or VAT) not included. That\'s the way it is at least in France and North America.

So, to make it clear and avoid any problem, many people use: \"$XXX plus tax\" or \" xxx euros plus VAT (or plus TVA)\".


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Ralf Lemster  Identity Verified
Germany
Local time: 22:19
English to German
+ ...
Check the tax status Sep 7, 2002

Although prices between businesses are usually quoted exclusive of VAT, to be on the safe side I always point out that VAT (if any) is an additional charge.





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Dave Greatrix  Identity Verified
United Kingdom
Local time: 21:19
Dutch to English
+ ...
If you are a one man band, Sep 7, 2002

you have got to go some to even qulify for VAT registration. (annual turnover 55,000 GBP) If you are not VAT registered you are not allowed by law to include VAT on your invoice.



Some UK VAT Facts:



Value Added Tax

Standard Rate 17.5%



Registration level from 1 April 2002 Taxable turnover - annual £55,000



Deregistration limit from 1 April 2002 Taxable turnover - next 12 months £53,000



Cash accounting entry limit Turnover under £600,000 p.a.

Annual accounting entry limit Turnover under £600,000 p.a.



Flat rate scheme entry limit Turnover under £125,000 p.a. If taxable turnover below 100,000





[ This Message was edited by: on 2002-09-07 11:45 ]


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Kevin Harper  Identity Verified
United Kingdom
Local time: 21:19
German to English
+ ...
You can register voluntarily. Sep 7, 2002

If your earnings are below those mentioned above, you can still register voluntarily.



However, unless you have (and I don\'t see why you should), then you don\'t charge VAT.



One of the reasons you shouldn\'t is that you will have to have formal accounts which are kept up to date and in a prescribed format. However, for income tax purposes, you only need to keep the documents that would form the basis of these accounts (invoices and receipts).



In any case, as I understand it, you should make it clear if anything is not included, such as VAT.


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Izabella Kraus  Identity Verified
Local time: 22:19
English to Polish
+ ...
Do I have to charge/pay VAT in Germany? Sep 12, 2002

I am a full time freelance translator and it is my first year in business. I haven´t got a tax advisor yet, as I had sooo many other things to worry about, I actually plan to go searching for one around October/November or so. However, it dawned on me recently, that if I had to pay VAT next year, I need to think about it in advance and prepare myself for it. I know that the limit of VAT-free revenue is just above EUR 16.000 (which you can´t really help exceeding if you want to live from your translator´s work!), but on the other hand, 90% of my clients are abroad: UK, Spain, USA. The German ones are few and I wouldn´t mind dropping them, if it saved me the mess with VAT ). Maybe someone just knows, how it works in Germany and could advise me? I would also appreciate if VAT payers wanted to share their experience with me: Can it put off clients, if you charge them VAT? Can it influence the business in a negative way? I´ll be most grateful for your feedback.

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Ralf Lemster  Identity Verified
Germany
Local time: 22:19
English to German
+ ...
Answer to the second part... Sep 12, 2002

Hi!

Can\'t give you an answer to the first part of your post - all I can say is: get in touch with a tax advisor a.s.a.p.



Quote:


I would also appreciate if VAT payers wanted to share their experience with me: Can it put off clients, if you charge them VAT? Can it influence the business in a negative way?


Not at all - as long as you work for clients who run a business and are registered for VAT. For them, the VAT they pay you is a deductible (\"Vorsteuer\" - input tax) which they can offset against their own VAT liability.


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xxxmmachado
English to Portuguese
Is there a EU regulation stating this? Jan 2, 2003


Hello,



Do you know if there is a EU regulation stating that translators working to other EU countries do not have to pay VAT? Is seems that this is read differently among EU countries and it shouldn\'t. Please advise if you can - a EU regulation on this would be great as Tax Advisors here seem to follow the internal rule and a perfect confusion is already stablished.



Thanks for all your help

Kind regards,

Mónica Machado


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Ralf Lemster  Identity Verified
Germany
Local time: 22:19
English to German
+ ...
...the wrong way round? Jan 2, 2003

Quote:


Do you know if there is a EU regulation stating that translators working to other EU countries do not have to pay VAT?



This sounds like a misconception - if you\'re working to other countries (i.e. for customers outside your home country), you never pay VAT - the issue is whether or not you need to charge it to your customers (in which case you would need to forward it to the tax authorities in your home country).

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Brian KEEGAN
Local time: 22:19
French to English
+ ...
VAT in European countries Feb 10, 2003

If you\'re based in France, for instance and charging a client in Germany, for instance, you don\'t charge VAT. The revenue you collect from your German client is declared in your VAT returns as \"exportations intra-communautaire\" (EU-EU exports - you\'re exporting a service from one EU country to another).



If you\'re based in France and charging a client in Russia, you don\'t charge VAT, and the revenue you collect is declared in your VAT returns as \"exportations hors UE\" (exports outside EU).



If you\'re based in France and charging a client in France, you charge VAT at 19.6% and the revenue you collect is declared in your VAT returns as \"ventes en France metropolitaine/DOM/TOM\".



The advantage of collecting VAT is that you get to offset the VAT you pay on goods and services acquired for business purposes against the VAT you\'ve collected from clients. So, if you pay 1000 euro for a computer, you reclaim 196 euro in VAT... If the VAT you\'re reclaiming is higher than the VAT you\'ve collected from your clients, the tax authorities give you a VAT refund. Thus, it\'s always advantageous to be registered for VAT if your situation allows it.



This is how VAT works in all European countries.


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Kay Fisher
German to English
+ ...
Amazon.co.uk charges VAT to non-UK EU customers, are they wrong? Feb 12, 2003

Quote:


This is how VAT works in all European countries.





Which is why amaozon.co.uk charges me VAT when it sends me books to Austria?



see: http://www.amazon.co.uk/exec/obidos/tg/browse/-/502576/ref=w_h__brbx_c_2_1/026-9110946-7478039



According to them, they have to bill non-UK EU cutomers at the cutomer\'s local rate of VAT. Is this something special for amazon or books, or does it apply to everyone i.e. us too?



Kay

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Brian KEEGAN
Local time: 22:19
French to English
+ ...
Exactly ... Feb 13, 2003

[quote]

On 2003-02-12 09:48, KFF wrote:

Quote:


This is how VAT works in all European countries.





Which is why amaozon.co.uk charges me VAT when it sends me books to Austria?



... the location at which the transaction involving the purchase of books is performed is Austria, not the UK, so therefore Austrian VAT is applicable. It\'s like as though your computer is an outlet of Amazon located in Austria. When you click on \"buy\", you are doing so in Austria, not the UK. i.e. the physical act of purchasing the book takes place in Austria, which means that although the book might need to be shipped from Britain, or China, or Spain, it is not an export/import transaction.



This wouldn\'t apply to us because when we sell translation services cross-border, the transaction is deemed a services import/export transaction. The service is rendered from France, for example, to a client in Austria, for example, and paid for to a bank account in France. Unless your client can \"buy\" your translation by clicking on \"buy\" on your website, in which case the local VAT (at the client\'s location) applies.

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xxxMarc P  Identity Verified
Local time: 22:19
German to English
+ ...
amazon.co.uk Feb 13, 2003

> Which is why amaozon.co.uk charges me VAT when it sends me books to Austria?<



I was astonished to read this, so I followed it up. According to the UK Customs & Excise, businesses in an EU country with sales above a certain level in other EU countries are obliged to be VAT-registered in those countries, and then levy VAT at the applicable rates. That is clearly what Amazon is doing.



This should only make a difference to translators who are not VAT-registered, as those who are can offset the VAT against the VAT they themselves charge, just as if they had bought their books (for business purposes) in their own countries.



Whether this regulation also applies to providers of services (e.g. translations), or only to providers of goods, I don\'t know.



Marc


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Daina Jauntirans  Identity Verified
Local time: 15:19
Member (2005)
German to English
+ ...
Not in the US Feb 13, 2003

Quote:


On 2002-09-06 20:36, Dan LP wrote:


In countries like UK the custom is to include VAT in a price. In countries like US often a price quoted is free of tax, VAT being added on top.








There is no VAT in the US. We have sales tax in most places (not all states have it), but that isn\'t charged on translations. Freelancers pay estimated quarterly income tax on their income to their states and the federal gov\'t. and square that up at the end of the year, i.e. pay what remainder is due, or get refunded a certain amount if they overpaid.

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