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Thread poster: Paul Carmichael
VAT nonsense

Paul Carmichael  Identity Verified
Spain
Local time: 10:10
Member (2011)
Spanish to English
Jan 9, 2012

Why do Spanish outsourcers add this to tenders:

"PS: ***Applicants within the EU and outside Spain MUST provide an INTRACOMMUNITARY VAT REG number. SPANISH LAW forces us to indicate this number in all our transactions before proceeding to any payment.***

... when it's clearly wrong?

A lot of self-employed in the UK will not be charging VAT, so how could they possibly supply a VAT number?


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Tom in London
United Kingdom
Local time: 09:10
Member (2008)
Italian to English
Indeed Jan 9, 2012


Paul Carmichael wrote:

Why do Spanish outsourcers add this to tenders:

"PS: ***Applicants within the EU and outside Spain MUST provide an INTRACOMMUNITARY VAT REG number. SPANISH LAW forces us to indicate this number in all our transactions before proceeding to any payment.***

... when it's clearly wrong?

A lot of self-employed in the UK will not be charging VAT, so how could they possibly supply a VAT number?


Indeed- this silly Spanish thing seems to go on and on. No other EU member state requires it and if the UK-based translator is not VAT-registered it is impossible !

[Edited at 2012-01-09 13:18 GMT]


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Ty Kendall  Identity Verified
United Kingdom
Local time: 09:10
Hebrew to English
What is wrong with the Spanish? Jan 9, 2012

Thank whatever deity(ies) may or may not be out there that I have never yet crossed paths with a Spanish agency or client....

...This issue simply refuses to die. If you search the forums there are massively long threads/debates/arguments with a ton of information, you'd think that this would be enough to deter Spanish based agencies/clients or allow them to see the error of their ways, but no.

Personally, I think it's intentional, as retribution for the Spanish Armada.


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Tom in London
United Kingdom
Local time: 09:10
Member (2008)
Italian to English
Spain Jan 9, 2012

I recently visited Spain and was amazed to see the people all walking around and behaving normally. Amazing.

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Ty Kendall  Identity Verified
United Kingdom
Local time: 09:10
Hebrew to English
Erm....ok Jan 9, 2012


Tom in London wrote:

I recently visited Spain and was amazed to see the people all walking around and behaving normally. Amazing.


This is a relief.


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Susanna Garcia  Identity Verified
Local time: 09:10
Italian to English
+ ...
More nonsense Jan 9, 2012

Che???

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Laurent KRAULAND  Identity Verified
France
Local time: 10:10
French to German
+ ...
What's wrong with you the English? Jan 9, 2012

The requirement for a VAT number -whetever one pays VAT or not- has existed Europe-wide for some years.

It seems that the United Kingdom wants to make an exception here (salutes HRM and bows his way out.)


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Tom in London
United Kingdom
Local time: 09:10
Member (2008)
Italian to English
English? Jan 9, 2012


Laurent KRAULAND wrote:

The requirement for a VAT number -whetever one pays VAT or not- has existed Europe-wide for some years.

It seems that the United Kingdom wants to make an exception here (salutes HRM and bows his way out.)


I am not English. I'm Irish.

Under UK law there is no obligation to be VAT-registered unless your turnover exceeds
GBP 73,000. This has never been a problem for any of my clients in Italy, Germany, the Netherlands, etc.

So what is wrong with the Spaniards?


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Laurent KRAULAND  Identity Verified
France
Local time: 10:10
French to German
+ ...
What's wrong with them Spaniards? Jan 9, 2012


Tom in London wrote:


Laurent KRAULAND wrote:

The requirement for a VAT number -whetever one pays VAT or not- has existed Europe-wide for some years.

It seems that the United Kingdom wants to make an exception here (salutes HRM and bows his way out.)


I am not English. I'm Irish.

Under UK law there is no obligation to be VAT-registered unless your turnover exceeds
GBP 73,000. This has never been a problem for any of my clients in Italy, Germany, the Netherlands, etc.

So what is wrong with the Spaniards?


Under EU law, there's an obligation to be VAT-registered - have a VAT ID number, nothing more - as soon as you do business abroad (outside of the United Kingdom of England, Wales and Northern Ireland). Your IT, DE, NL etc. may accept the fact that you don't need to register for VAT.

Some clients (like those in Spain or maybe... France?) don't accept it as they take this EU regulation literally.


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Tom in London
United Kingdom
Local time: 09:10
Member (2008)
Italian to English
Business Jan 9, 2012


Laurent KRAULAND wrote:


Tom in London wrote:


Laurent KRAULAND wrote:

The requirement for a VAT number -whetever one pays VAT or not- has existed Europe-wide for some years.

It seems that the United Kingdom wants to make an exception here (salutes HRM and bows his way out.)


I am not English. I'm Irish.

Under UK law there is no obligation to be VAT-registered unless your turnover exceeds
GBP 73,000. This has never been a problem for any of my clients in Italy, Germany, the Netherlands, etc.

So what is wrong with the Spaniards?


Under EU law, there's an obligation to be VAT-registered - have a VAT ID number, nothing more - as soon as you do business abroad (outside of the United Kingdom of England, Wales and Northern Ireland). Your IT, DE, NL etc. may accept the fact that you don't need to register for VAT.

Some clients (like those in Spain or maybe... France?) don't accept it as they take this EU regulation literally.


Well, I don't do any business outside the UK. People don't pay tax in every country with which they do business; they pay tax in the country in which they are resident for tax purposes.

Otherwise we'd all be registered in every country with which we work and would be filling in a tax return in each of those countries - in each of the languages and with a native accountant in each country.

That way lies madness.

[Edited at 2012-01-09 16:24 GMT]


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Alex Lago  Identity Verified
Spain
Local time: 10:10
Member (2009)
English to Spanish
+ ...
Nothing wrong Jan 9, 2012

People blame the Spanish agencies but it is not them you should blame, it is Spanish tax law.

Spanish tax law says that in order for services provided inside the EU to be tax exempt they must be provided by/for an independent professional or a company, in order to prove that they are not an end consumer, Spanish law says you have to include their VAT registration number in the invoice, if you don't and you get audited by the tax authorities you would be back-charged and fined for all that VAT, you can't turn around and say "Oh sorry the person told me that in their country they don't have to be tax registered", they don't care, if there is no registration number they assume it was an end client and therefore VAT should have applied.

So don't blame Spanish agencies for obeying the law.


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Giles Watson  Identity Verified
Italy
Local time: 10:10
Member
Italian to English
The requirement is "extra red tape" Jan 9, 2012

Hi Laurent,

Obviously, the Spanish demand for VAT registration is not restricted to UK-based traders. The practical problem is that the threshold for registration in the UK is quite high, which means it is perfectly possible to make a living without ever troubling the Vatman. Small UK-based traders are being penalised by a demand that is fundamentally unreasonable (the Hacienda has no authority to tell non-Spanish businesses how they should organise their affairs).

IIRC, the tax people in France will give you a pretend VAT number if your earnings are below the threshold for registration and you need to invoice a client abroad. I can only assume that the UK authorities have yet to get around to adding these extra few inches/centimetres to the Gordian knot of EU red tape. I don't honestly see why they should, though. Bear in mind that the EU reverse charge mechanism is already in place to deal with situations like this.


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Tomás Cano Binder, CT  Identity Verified
Spain
Local time: 10:10
Member (2005)
English to Spanish
+ ...
I have to agree with Laurent - Edited Jan 9, 2012

I am affraid I have to agree with Laurent: in my opinion it is the British legislation that hasn't applied the VAT regulations correctly, leaving the door open to be VAT registered or not. In all EU countries, you have to have VAT number for any transaction, either domestic or international.

The exception to this rule in the UK is causing all the trouble, not the Spanish regulations, which simply reflect the EU's. To me it would be perfectly OK to operate inside the UK with no VAT number, but if you want to deal with Spanish companies you will need a VAT number, and I am certain this is also the case with any other European country.

I however agree that it is not quite fair for customers to withhold payment until the lack of VAT number is corrected.

Edited to add this (after several deep breaths): OK, OK. I understand that if UK nationals are not required to have a VAT number locally, Spanish tax authorities/law should not require it in your case either, and that you should be able to avoid the problem producing some kind of certificate issued over there to prove that you are allows not to have a VAT number.

Unfortunately there is very little Spanish companies can do in this matter, unless your tax authorities had a loooong conversation about it to the Spanish tax authorities or the EU Commission and our regulations were changed accordingly.



[Edited at 2012-01-09 16:47 GMT]


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Tom in London
United Kingdom
Local time: 09:10
Member (2008)
Italian to English
Tax law Jan 9, 2012


Alex Lago wrote:

People blame the Spanish agencies but it is not them you should blame, it is Spanish tax law.


UK residents are not subject to Spanish tax law. We are subject to UK tax law.


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Tom in London
United Kingdom
Local time: 09:10
Member (2008)
Italian to English
Trouble Jan 9, 2012


Tomás Cano Binder, CT wrote:

UK is causing all the trouble



I'm not having any trouble - but currently I have no clients in Spain and by the looks of it I won't be having any either !


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