VAT within and outside of the European Union (Dutch and German translators please help)
Thread poster: M. Gasseling
M. Gasseling
Netherlands
Local time: 02:58
German to Dutch
+ ...
Sep 15, 2005

Dear all,

Sorry to have to bring this up again, but I have a question regarding VAT to be charged to clients within and outside of the European Union.

I have read through many posts and the general idea seems to be that you should charge "0%" VAT within the European Union, as long as your client has a valid EU VAT number (plus since january 2004 you have to state it on your invoice, including your own VAT number).

I am a Dutch translator and have done this for years without any complaints from the Dutch belastingdienst (tax department), but when I called a couple of months ago about a question regarding charging VAT to a potential US customer, they told me that "if the service is carried out within the Netherlands, I should charge 19% VAT".

I happened to mention I knew that charging VAT within the EU was not necessary as long as I had a valid VAT number, but the tax department disagreed there, saying that it was not a good I was exporting, but a service.
And since that service (translation) was connected to technical translations and not literary ones (and I wasn't a journalist, composer or author), I was supposed to charge 19% VAT.

I was quite amazed and expressed my doubts. The gentleman I was talking to told me to check with my own tax office then. I had my accountant look into the matter. He first contacted me with the answer that my invoice shouldn't contain any VAT, and have the phrase "VAT transferred (BTW verlegd)" on there.

I then sent invoices like this to a German client of mine, a translation agency, who insisted that the invoice should state "Umsatzsteuer 0%, EURO 0" as it had done before and that the phrase "Umsatzsteuer umgelegt" (VAT transferred) would give them lots of trouble because they would have to pay the VAT and that this was unnecessary because VAT charges were regulated via the EU VAT number.

My accountant has recently contacted the tax department again, and they said the phrase "VAT transferred"is an absolute necessity as translators fall under a speciale rule. He then asked why the rules could not be simplified so that both goods and services could fall under the "0%" rule, but the tax department merely replied that this was putting it too simply.

I would like to ask Dutch, Belgian and German and for that matter any other EU translators how they can be so sure about what they have to charge in terms of VAT (especially the "0%" rate) and whether you could please point me to some EU legislation that mentions services falling under the same rules as goods or that mentions anything about transferring the VAT. What exactly do you state on your invoices? Do you just charge 0%, do you mention something like VAT transferred.

I have read Anjo's reply with links to some reading material, but it doesn't make me sure that services are seen the same way goods are. The Dutch tax department distinguishes between them by saying that services, unlike goods, cannot be touched or seen, therefore they have a different status in EU exports.

Sorry again for bringing this up yet again, but I feel I need some tangible evidence in my fight with the tax department, or they will just dismiss this as "hearsay".

I would also like to hear from any German translators who can point me to German legislation which states that intra-community services are seen as EU exports which fall under the "0% rule" and no distinctions are made between goods and services.

Would anybody know whom to contact at the German Finanzamt for an official statement on what invoices to German clients should and should not contain?

Any and all help is greatly appreciated!

Thanks very much in advance to all of you for your help,

Mascha Gasseling

[Edited at 2005-09-15 15:14]

[Edited at 2005-09-15 15:24]


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xxxMarc P  Identity Verified
Local time: 02:58
German to English
+ ...
VAT within and outside of the European Union Sep 15, 2005

Per Döhler's guide is a very good one from the German perspective:

http://www.triacom.com/archive/umsatzsteuer.de.pdf

Marc


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xxxKlarita
Local time: 02:58
French to English
+ ...
Indeed... Sep 15, 2005

Hi!
I had lots of troubles as well with the Belastingdienst, and I know lots of translators who have experienced the same: you can call them and ask 10 times the same question, you will have 10 different answers...
For my clients outside the Netherlands but inside the EU, I have always indicated 0% VAT on my invoices, and it has been ok so far...
I have also been working in-house for a translation agency in the NL, and I have seen invoices from translators working for us from France and Portugal: they were all doing the same, so... I think this is the right solution!
Success met je BTW


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Jutta Deichselberger  Identity Verified
Local time: 02:58
Member (2004)
French to German
+ ...
In Germany Sep 15, 2005

Sorry, mein Englisch lässt keine längeren Erläuterungen zu und da du Deutsch zu deinen Sprachen zählst, erlaube ich mir mal, auf Deutsch zu antworten:

In Deutschland läuft das folgendermaßen ab (habe ich schon vor einer Weile mit meinem Steuerberater abgeklärt):

Bei Kunden innerhalb Deutschlands muss die Rechnung die Ust. enthalten (wenn du Ust.pflichtig bist)

Bei Kunden in EU-Ländern: keine Umsatzsteuer, aber unbedingt Angabe der UID-Nummer des Kunden

Bei Kunden in europäischen Ländern, die nicht zur EU gehören, aber auch bei Kunden in außereuropäischen Ländern: keine Umsatzsteuer und keine UID-Nummer, da diese in diesen Ländern gar nicht vergeben wird!!!

Gruß
Jutta


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xxxMarc P  Identity Verified
Local time: 02:58
German to English
+ ...
VAT within and outside of the European Union Sep 15, 2005

traduc03 wrote:

Bei Kunden in EU-Ländern: keine Umsatzsteuer, aber unbedingt Angabe der UID-Nummer des Kunden


... es sei denn:

- der Kunde ist Privatperson: dann doch mit deutscher Umsatzsteuer
- der Kunde ist Geschäftstreibender, jedoch nicht (in seinem Land) umsatzsteuerberechtigt: dann ohne Umsatzsteuer und auch ohne UID-Nr (da er in dem Fall auch keine hat).

P.S. Mascha: if accounts aren't your thing (like they aren't mine), get yourself an accountant (as I have).

Marc

[Edited at 2005-09-15 18:57]


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Jutta Deichselberger  Identity Verified
Local time: 02:58
Member (2004)
French to German
+ ...
Ja, Marc hat Recht! Sep 15, 2005

Stimmt, daran hatte ich nicht gedacht. Das ist bei mir noch nie vorgekommen...
Aber ohne Steuerberater käme ich auch nicht klar...


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M. Gasseling
Netherlands
Local time: 02:58
German to Dutch
+ ...
TOPIC STARTER
Thank you Sep 16, 2005

Marc und Jutta,

herzlichen Dank für eure Erläuterungen. Ich werde dem Finanzamt auch einen Brief schreiben. Aber ich bin mir immer sicherer, dass ich meine Rechnungen immer richtig aufgestellt habe.

Klarita,

Ook mijn hartelijke dank voor jouw opmerkingen. Samen met de opmerkingen van Marc en Jutta voel ik me gesterkt in de gedachte dat ik het bij het juiste eind heb. Ik kan me niet voorstellen dat zoveel vertalers het verkeerd zouden doen en nog minder dat hun aangiften dan overal zomaar zouden worden geaccepteerd.

Thanks for your opinions, I feel that if so many translators have been sending out invoices this way, it must be correct. However, more info is always welcome!

Greetings,

Mascha


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Anjo Sterringa  Identity Verified
Spain
Local time: 02:58
Member (2003)
English to Dutch
+ ...
Some clarification Sep 16, 2005

A VAT rate of 0% is not the same as 'transferred'(or "deferred" or "reverse charge mechanism").
-First establish: is your service subject to VAT? (In the Netherlands: yes, unless it's literary translation).
-Then the EU story starts: both seller and buyer have a VAT number: verleggingsregeling/reverse charge mechanism
Your German counterpart must be confusing 0% with VAT-deferred. If the operation is eligible for VAT SOMEONE will have to pay VAT. Only, if I am the (end) buyer of the translation, I can deduct this VAT as well.
-No-EU: NO VAT applies.: 0%

I understand that the Dutch belastingdienst has problems with their interpretation of where the service is performed/delivered - although in practice this has been accepted for years. And what is more - in other countries it is no problem.
I think they may be doubting if a translator's services are electronically delivered services.
"Elektronische dienstverlening
Onder elektronische dienstverlening kan worden verstaan (de hierna volgende opsomming is niet-limitatief):

het langs elektronische weg leveren en onderbrengen van websites, het onderhoud op afstand van programma's en uitrustingen;
de levering langs elektronische weg van software en de bijwerking ervan;
de levering langs elektronische weg van beelden, geschreven stukken en informatie, en de terbeschikkingstelling van databanken;
de levering langs elektronische weg van muziek of films, van spelen, met inbegrip van kans- of gokspelen, en van uitzendingen of manifestaties op het gebied van politiek, cultuur, kunst, sport, wetenschappen of ontspanning;
de levering langs elektronische weg van onderwijs op afstand.

http://www.belastingdienst.nl/zakelijk/omzetbelasting/ob04/ob04-09.html

Invoicing requirements:
I find the VAT Directives very inaccesible, so I limit what I state on my invoice to: VAT deferred pursuant to Directive 77/388/EEC, on a self-assessment basis under the "reverse charge mechanism". This is normally enough. Also the new Dutch legislation in (electronic) invoices states that you do not have to name the applicable article(s).
See: WV03_0267a (document to be found at the NL Ministry of Finance site). This is the Dutch implementation of the EU Invoicing Directive.
http://europa.eu.int/comm/taxation_customs/taxation/e_invoicing/e_invoicing_faq1_en.htm#1.0


I should think this is typically an issue for the Dutch translators organisation to sort out once and for all.... http://www.ngtv.nl/

[Edited at 2005-09-16 11:38]


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Olga Shikalova  Identity Verified
Local time: 02:58
Russian to English
+ ...
VAT question again... Jan 12, 2012

Sorry for bringing this topic back again...
I am not really good in Dutch... But still have to "fight" with dutch laws.

I am registered as a private entrepreneur and mostly all the questions about a VAT percentage are clear to me.

If my customer inside EU has a VAT number, VAT percentage will be 0 for me. If customer doesnt have that - I have to pay 19% VAT.

1. But if my customer outside of EU country (for example USA). What percentage will it be? Still 0 VAT?

From previous topics it is not clear for me yet - do the services have the same tax percentage as goods or not?

2. If our income is less than 17000 per year what will be the size of our year tax? As far as I understand it should be some strict amount?

Thanks for your time and replies.
Best regards, Olga Shykalova.


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