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Portuguese freelancer charging VAT to client in US
Thread poster: Kathi Stock

Kathi Stock  Identity Verified
United States
Local time: 21:10
Member (2002)
English to German
+ ...
Oct 3, 2006

Hi all,
Maybe you can help me out here. I have a freelance translator in Portugal that provides translations for me. His invoice includes VAT, even though that I reside outside of the EU. Is that correct? All other invoices I get from translators residing within the EU do not show VAT.

Any comments are appreciated.

Thanks,

Kathi


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John Jory  Identity Verified
Germany
Local time: 04:10
Member (2004)
English to German
+ ...
No VAT Oct 3, 2006

"Da die USA keine Mehrwert- sondern eine Sales and Use Tax haben, existiert in den USA kein Vorsteuerabzug. Dementsprechend besteht in den USA auch keine Möglichkeit einer Umsatzsteuererstattung."

see http://www.karlsruhe.ihk.de/produktmarken/international/publikationen_/umsatzsteueriminundausland.jsp


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Niina Lahokoski  Identity Verified
Finland
Local time: 05:10
Member (2008)
English to Finnish
+ ...
VAT only in EU Oct 3, 2006

Hi,

VAT is only applicable in EU countries, so the translator should not include VAT in his/her invoice. Just ask the translator to send you a new invoice without VAT.

[Edited at 2006-10-03 11:15]


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Ivana de Sousa Santos  Identity Verified
Portugal
Local time: 03:10
French to Portuguese
+ ...
Answer of a Portuguese freelancer Oct 3, 2006

Hi Kathi,

We can only charge VAT inside Portugal, to Portuguese customers. Even to EU countries we don't have to charge it.

I hope it helps.

Best,
Ivana


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Kathi Stock  Identity Verified
United States
Local time: 21:10
Member (2002)
English to German
+ ...
TOPIC STARTER
Any web site references? Oct 3, 2006

Hi Ivana,
Are there any web links (even if they are in Portuguese) that support your opinion?

Thanks,

Kathi

Ivana de Sousa Santos wrote:

Hi Kathi,

We can only charge VAT inside Portugal, to Portuguese customers. Even to EU countries we don't have to charge it.

I hope it helps.

Best,
Ivana


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Ivana de Sousa Santos  Identity Verified
Portugal
Local time: 03:10
French to Portuguese
+ ...
I'll try to find them out for you Oct 3, 2006

:0)

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Carla Araújo  Identity Verified
Portugal
Local time: 03:10
English to Portuguese
+ ...
VAT Article Oct 3, 2006

Hi Kathi,

Please check:

http://www.gesbanha.pt/fisc/codigo_iva/art6.htm

Article 9b.

Best regards,
Carla


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Kathi Stock  Identity Verified
United States
Local time: 21:10
Member (2002)
English to German
+ ...
TOPIC STARTER
Thanks, Carla! Oct 3, 2006

That link is very helpful. Thanks a lot!

Kathi

Carla Araújo wrote:

Hi Kathi,

Please check:

http://www.gesbanha.pt/fisc/codigo_iva/art6.htm

Article 9b.

Best regards,
Carla


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Ivana de Sousa Santos  Identity Verified
Portugal
Local time: 03:10
French to Portuguese
+ ...
I'm back - Freelance + translation related article Oct 3, 2006

http://www.dgci.min-financas.pt/siteinternet/_sgt/guiaivatex.htm#trad

Serviços de tradução

R: Em sede de IVA, as prestações de serviços seguem, regra geral, a tributação no país onde o prestador tem a sua sede, estabelecimento estável ou, na sua falta, o domicílio a partir do qual os serviços sejam prestados, conforme dispõe o n.º 4 do art.º 6º do CIVA.

Todavia, aquela regra comporta várias excepções descritas nos n.º 5 a 21 do mesmo art.º 6º, tendo cada uma delas regras próprias de localização.

Os serviços de tradução, quer efectuados por pessoas colectivas, quer por trabalhadores independentes, configuram o tipo de operações previstas no art.º 6º, n.º 8, alínea c) do CIVA.

Por este facto, as prestações de serviços de tradução efectuadas a um adquirente domiciliado num outro Estado membro, que prove que nesse país têm a qualidade de sujeito passivo, ou a um adquirente domiciliado num país não pertencente à Comunidade Europeia, não se encontram sujeitas a IVA em Portugal, nos termos, respectivamente, das alíneas a) ou b) do n.º 9 do art.º 6º do CIVA, conjugadas com a alínea c) do n.º 8 do mesmo artigo.

O número de identificação fornecido pelo adquirente dos serviços, sujeito passivo na Comunidade Europeia, poderá ser confirmado através do site da DGCI: http://www.dgci.min-financas.pt.

Na factura ou documento equivalente emitido deverá constar o motivo da não liquidação do imposto, conforme o exigido no art.º 35º, n.º 5, alínea e) do CIVA, neste caso apondo a menção “Artigo 6º, nº 9 alínea a) ou b) do CIVA.

Relativamente ao preenchimento da declaração periódica, os valores referentes às operações realizadas / localizadas fora do território nacional deverão ser indicados no quadro 06 – campo 8 (operações previstas na alínea b) do n.º 1 do art. 20º do CIVA).


This is what the article states. I know it's in Portuguese, but in this particular line it states that VAT is not charged in any Member State or other State not belonging to the EU according to a) or b) of paragraph 9 of Article 6 of the VAT Code:

Por este facto, as prestações de serviços de tradução efectuadas a um adquirente domiciliado num outro Estado membro, que prove que nesse país têm a qualidade de sujeito passivo, ou a um adquirente domiciliado num país não pertencente à Comunidade Europeia, não se encontram sujeitas a IVA em Portugal, nos termos, respectivamente, das alíneas a) ou b) do n.º 9 do art.º 6º do CIVA, conjugadas com a alínea c) do n.º 8 do mesmo artigo.


"Serviços de Tradução" means "Translation Services" and this text is taken out from the IRS website.

I hope it REALLY helps you out now.

Don't hesitate to contact me if you need any more information.

Best,
Ivana


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Kathi Stock  Identity Verified
United States
Local time: 21:10
Member (2002)
English to German
+ ...
TOPIC STARTER
Thanks, Ivana Oct 3, 2006

That is VERY helpful. Thanks so much.

Kathi


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RobinB  Identity Verified
Germany
Local time: 04:10
German to English
EU website Oct 3, 2006

Hi Kathi,

See:

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm

in particular "VAT on imports and exports". Says it all in a couple of lines.

HTH,
Robin


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xxxAdrian MM.
Local time: 04:10
French to English
+ ...
'Reverse charge' not applicable Oct 3, 2006

The translator has got it the wrong way round. If you were supplying goods or services out of the US to him in the EU, he would have to charge himself output VAT so as not to give non-EU suppliers 'undue preference'.


EU businesses are often required to charge themselves VAT under the *reverse charge* mechanism where services are received from another member state or from outside of the EU
en.wikipedia.org/wiki/Value_added_tax


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clyx
Spain
Spanish to German
+ ...
VAT Oct 3, 2006

But how do we justify the "export" of the service?

When you sell physically something you have export documents. In Spain you have to present them to the tax office together with the invoice. These docs justify the export. I've checked eu-official web on e-services but it isn't clear.

Does anybody has info on this matter?

Thx


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Vito Smolej
Germany
Local time: 04:10
Member (2004)
English to Slovenian
+ ...
Hi Kathi... Oct 3, 2006

Maybe you can help me out here. I have a freelance translator in Portugal that provides translations for me...

I am 16% cheaper up front - no VAT, cross my heart. Can handle German, Slovenian, also Flemish, French, Finnish, Latvian, Italian...

Absolutely the lowest EU VAT rate on the market! Show me a lower offer and I'll beat it on the spot! Rain checks available on request.

Vitomir (Vito) no-VAT Smolej


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