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VAT UE invoice problem
Thread poster: Slawomir Nieciecki

Slawomir Nieciecki  Identity Verified
Poland
Local time: 12:07
English to Polish
+ ...
Mar 19, 2009

Hello everybody

This is my first post, I hope this is the right place for such subject.
I live in Poland, recently I have made a translation for Hungarian translation agency.
Our countries are both the UE members, we both have the EU VAT numbers, so I issued an invoice in accordance with Article 9(2)(e) of the 6th EU VAT Directive (levy of VAT reverse charged to recipient of service).
It is proper in accordance with Polish law and also with ProZ forum information.
But agency representative denied to transfer the money.
In her opinion, I should pay VAT at place of my residence with money from my salary.
What do you think about it?

Best regards
Slawomir Nieciecki


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Andrzej Lejman  Identity Verified
Local time: 12:07
German to Polish
+ ...
Your approach Mar 19, 2009

is absolutely correct.

I have a remark on all my invoices:

The VAT shall be paid by the Buyer in their country of residence according to the rates
and regulations applicable in that country.


Regards

A.


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Rebekka Groß  Identity Verified
Local time: 11:07
English to German
Hm Mar 19, 2009

Hi Slawomir

I'm not 100% sure what's going on here but as far as I'm aware VAT is zero-rated on invoices issued within the EU so long as both parties are VAT registered. So basically, no VAT is charged, received or paid.

When I invoice a company in Germany, Italy, Hungary, etc. I simply put N/A in the line that normally contains the amound of VAT.

My invoice looks a little like this:
....
subtotal: X
15% VAT: N/A
__________________________
Grand total: X

Would this not apply to your situation?



[Edited at 2009-03-19 16:21 GMT]


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Laurent KRAULAND  Identity Verified
France
Local time: 12:07
French to German
+ ...
No Way! Mar 19, 2009

Dear Slawomir,
the VAT between professionals of different EU countries is always payable by the client at the rate fixed in their country of residence, in this case Hungary.

As a service provider (even within your own country), paying yourself the VAT on your own invoices is a tale of the grotesque and arabesque.

Maybe this problem is linked to the agency representative herself (there are in fact some special people around).

Laurent K.


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Marie-Hélène Hayles  Identity Verified
Local time: 12:07
Italian to English
+ ...
I'm with Rebekka Mar 19, 2009

I can't see how the situation varies from one EU country to another!
VAT is not applied to invoices between two VAT-registered parties in two different EU countries.

On my invoices I have to add a phrase (in Italian) saying that the invoice is not subject to VAT, quoting the relevant law.


[Edited at 2009-03-19 16:26 GMT]


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Lutz Molderings  Identity Verified
Germany
Local time: 12:07
Member (2007)
German to English
+ ...
agree with Rebekka and Marie-Hélène Mar 19, 2009


I can't see how the situation varies from one EU country to another!
VAT is not applied to invoices between two VAT-registered parties in two different EU countries.


Correct. You would only have to add VAT if you were invoicing a private person, i.e. not a VAT-registered company.


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RobinB  Identity Verified
Germany
Local time: 12:07
German to English
No problem Mar 19, 2009

Slawomir,

If both you and the agency have VAT ID numbers, it's really simple: you don't charge VAT to the agency, and the agency doesn't pay it to you.

The agency adds the VAT payable on your invoice to its own national VAT return, and at the same time claims the same amount as input tax, i.e. effectively a zero return on that transaction.

You report the VAT payable on this intra-community service in your own national VAT return; there will certainly be a separate line item for these amounts on your VAT return.

HTH,
Robin


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Piotr Bienkowski  Identity Verified
Poland
Local time: 12:07
Member (2005)
English to Polish
+ ...
I do something similar Mar 19, 2009


When I invoice a company in Germany, Italy, Hungary, etc. I simply put N/A in the line that normally contains the amound of VAT.

My invoice looks a little like this:
....
subtotal: X
15% VAT: N/A
__________________________
Grand total: X



I simply write VAT: N/A and don't even mention the rate, because VAT is not applicable between parties registered as VAT payers in different countries, regardless of whether they are in the EU or outside of the EU.

Regards,

Piotr


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Gerard de Noord  Identity Verified
France
Local time: 12:07
Member (2003)
German to Dutch
+ ...
Four simple rules for translators who can charge VAT Mar 19, 2009

I believe someone posted the following rules on this website. They're short and clear.

1. No VAT for companies within the EU with a VAT number, provided the VAT number is mentioned on the invoice.
2. VAT for companies within the EU without a VAT number.
3. No VAT for companies outside the EU (whether they have a VAT number or not).
4. VAT for private individuals worldwide.

Regards,
Gerard


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Maarja Ora  Identity Verified
Estonia
Local time: 13:07
English to Estonian
+ ...
VAT is not applied in your case Mar 20, 2009

VAT is NOT applied to invoices between two VAT-registered parties in two different EU countries

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Parrot  Identity Verified
Spain
Local time: 12:07
Member (2002)
Spanish to English
+ ...
Some sticky points Mar 20, 2009

1. A company or professional not registered in the VIES database has to be charged VAT at the rate of the country where the invoice is issued.

2. A VIES-registered company is not charged the VAT of the country where the invoice is issued, but pays (offsets) that VAT in the client's country, at the client country's VAT rate.

Hope it helps.


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Ulrike Glaese  Identity Verified
Local time: 12:07
Member (2006)
English to German
VAT has to be paid, if ... Mar 23, 2009

... the project the translation deals with is located in your country and the customer comes from a non-EU country. Then the direct client can file for a tax return and will receive a refund, but it has to be paid first, at least in Germany.

If, for instance, you translate the specifications / BOQ of a construction project in your home country, you do have to charge the company VAT, if the company is registered in a country outside the EU, the US for instance. They can retrieve the money by filing a VAT statement, but this detour has to be taken.

This doesn't really apply here, but I wanted to complete the information, in case someone comes across this issue.


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Slawomir Nieciecki  Identity Verified
Poland
Local time: 12:07
English to Polish
+ ...
TOPIC STARTER
Thanks for your informations Apr 3, 2009

In spite of huge differences between Polish and Hungarian law, we have achieved successful cooperation and I will gladly work for them again.

Best Regards


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Krzysztof Pawliszak
Poland
Local time: 12:07
English to Polish
+ ...
similar Problem Jul 9, 2010

Hello everyone,
I have a very similar problem. I did the invoice for my client (an agency) in Hungary. He wrote to me that "Payment is only possible if you have a valid EU VAT number." I am not a VAT registered person. What should I do?
I am asking because I also work for an Italian agency and there is no need for VAT number. I just check "Freelancer in EU without VAT number" and that all. Should I write to the Hungarian agency just stating the same (ie. Freelancer in EU (Poland) without VAT number) on the Invoice?
Thanks.


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Donata Gumiero  Identity Verified
Local time: 12:07
Member (2008)
German to Italian
+ ...
Agree Jul 9, 2010

Gerard de Noord wrote:

I believe someone posted the following rules on this website. They're short and clear.

1. No VAT for companies within the EU with a VAT number, provided the VAT number is mentioned on the invoice.
2. VAT for companies within the EU without a VAT number.
3. No VAT for companies outside the EU (whether they have a VAT number or not).
4. VAT for private individuals worldwide.

Regards,
Gerard


This is exactly what I do and what my business consultant has told me to do and I know that the same rule should be applied in each country within EU.


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