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VAT when doing business with customers in other countries
Thread poster: Claudia J.
Claudia J.
United States
Local time: 01:01
German to English
+ ...
Oct 25, 2007

dear all,

i just found out that if i have clients in another country, i have to pay taxes there but the money i make is tax exempt in Germany (my home country and the place i live).

the money in other countries is also tax exempt, if i fall under a certain limit. does anyone know where i can find the limits for different countries? in my case i need to especially know about hungary (EU-country) and the czech republic (EU-country)

this is really important to me, as i don't want to do anything that could bite me in the ass (pardon my french) later.

please, i would really appreciate the help

[Subject edited by staff or moderator 2007-10-25 08:56]


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Ralf Lemster  Identity Verified
Germany
Local time: 07:01
English to German
+ ...
What kind of tax are you referring to? Oct 25, 2007

Hi clawitter,
i just found out that if i have clients in another country, i have to pay taxes there but the money i make is tax exempt in Germany (my home country and the place i live).

Who told you that?

More specifically, what kind of tax are we talking about - income tax or VAT?

As usual in such cases, my strong advice is to contact a qualified tax advisor.

Best regards,
Ralf


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Claudia J.
United States
Local time: 01:01
German to English
+ ...
TOPIC STARTER
Sorry Oct 25, 2007

I should have mentioned that I am talking about VAT. Income tax is payed in my own country.

I would contact a tax adviser, but with the little money I make it is way to expensive to ask one every time a question like this comes up as they charge up to 250 Euro just for a consultation.


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Ralf Lemster  Identity Verified
Germany
Local time: 07:01
English to German
+ ...
Lots of online resources Oct 25, 2007

Hi again,
Thanks for clarifying.
I suggest to start with the forum search function - there have been numerous discussions related to VAT, including links to online resources.

Best regards,
Ralf


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nordiste  Identity Verified
France
Local time: 07:01
Member (2005)
English to French
+ ...
ask your tax authorities in your residence country Oct 25, 2007

I don't know in which European country you live.

The best thing to do (and it's free !) is to ask your local tax authorities. They should have ressources about it with adaptation to your country's specific regulation.

You can have a look at their website to prepare your question and collect basic information.


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Claudia J.
United States
Local time: 01:01
German to English
+ ...
TOPIC STARTER
I did Oct 25, 2007

I wrote in my post that i'm from Germany, and I did ask my local tax authorities, but they said they don't know and they don't have to know my question refers to taxation in other countries.

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Erik Hansson  Identity Verified
Germany
Member (2002)
Swedish
+ ...
Searching the web Oct 25, 2007

Hi Clawitter,

why don't you check out these links:

http://www.steuernetz-forum.de/Rechnungstellung_an_Kunden_im_Ausland/Rechnungstellung_an_Kunden_im_Ausland.html

http://www.steuernetz-forum.de/Ausweisung_der_MwSt_2/Ausweisung_der_MwSt_2.html

http://de.wikipedia.org/wiki/Umsatzsteuer-Identifikationsnummer

http://www.bundesfinanzministerium.de

This is a complicated topic, but in general your invoices need to contain yours _and_ your business partner's EU VAT no. (EU-MwSt-Ident-Nr.). This is a proof for the tax authorities in both countries that you're registered for VAT, i.e. for domestic orders you charge VAT, but not for foreign orders.

Regards
Erik


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Claudia J.
United States
Local time: 01:01
German to English
+ ...
TOPIC STARTER
I understand... Oct 25, 2007

I understand what my invoice needs to contain, but what I don't know is whether I need to pay VAT in the country of the client. Because I don't have to pay VAT in Germany for those clients. And I know that up to a certain amount no VAT needs to be paid in the other countries either. But from some amount on it seems like one has to register in the country of the client and pay VAT there.

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nordiste  Identity Verified
France
Local time: 07:01
Member (2005)
English to French
+ ...
Where did you get this (somehow strange) information ? Oct 25, 2007

clawitter wrote:

I understand what my invoice needs to contain, but what I don't know is whether I need to pay VAT in the country of the client. Because I don't have to pay VAT in Germany for those clients. And I know that up to a certain amount no VAT needs to be paid in the other countries either. But from some amount on it seems like one has to register in the country of the client and pay VAT there.


VAT can be a complicated issue, but the good thing is that AFAIK you have only to register and pay with your own tax authorities. It's up to your client to declare and eventually pay on his own side.

I mean for us translators, providers of services.
There might be different rules if you import/export goods.

And in France the local tax authorities are very well aware of VAT related regulations, even in my small town, and they could answer to all my questions regarding this matter.


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RobinB  Identity Verified
Germany
Local time: 07:01
German to English
Goes with the territory Oct 25, 2007

clawitter wrote: I would contact a tax adviser, but with the little money I make it is way to expensive to ask one every time a question like this comes up as they charge up to 250 Euro just for a consultation.


If you are working as a self-employed translator (Freiberufler), then obtaining professional advice on tax and legal matters is part-and-parcel of your self-employment. Yes, of course there are plenty of resources online (including in Proz) that will give general advice, but only (in this case) a Steuerberater/tax adviser can give you the specific advice that is appropriate to your particular circumstances. Apart from anything else, if you get the tax wrong, you can't tell the tax authorities "well, that's what I read on the web".

A single meeting with a Steuerberater should be sufficient to cover all general tax-related issues of your self-employment, so there shouldn't be any need to consult one regularly.

Paying for professional advice is just as much part of the price of the "entry ticket" to being a self-employed translator as buying dictionaries and other reference works and buying proper licences for all your software (rather than pirated versions).


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Claudia J.
United States
Local time: 01:01
German to English
+ ...
TOPIC STARTER
yes, but Oct 25, 2007

All I wanted was some general info, as I figured that there must be lots of other German translators on here who also have clients in other countries and had to deal with this before. Isn't this what the forum is for? To exchange experiences and ask questions? Because if not, then I won't ask any questions anymore and rather find someone to pay every time I have a question that I am sure other people in the same situation had to deal with before.

That's all!


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Claudia J.
United States
Local time: 01:01
German to English
+ ...
TOPIC STARTER
strange information, source Oct 25, 2007

"Wenn die Lieferschwelle überschritten wurde muss der deutsche Unternehmer sich für Geschäfte zu 2 und 3 im jeweiligen Empfängerland Umsatzsteuerlich Anmelden und die dortige Umsatzsteuer berechnen und Abführen (vgl. § 3c UStG)."

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Christine Schmit  Identity Verified
Luxembourg
German to French
+ ...
goods vs. services ? Oct 25, 2007

clawitter wrote:

"Wenn die Lieferschwelle überschritten wurde muss der deutsche Unternehmer sich für Geschäfte zu 2 und 3 im jeweiligen Empfängerland Umsatzsteuerlich Anmelden und die dortige Umsatzsteuer berechnen und Abführen (vgl. § 3c UStG)."


I am not a German lawyer or tax consultant, but could it be that this applies to goods, not services? The rules differ for goods and services. As a translator, you a selling a service, you are not exporting goods, so maybe that is were the confusion comes from.
VAT is regulated on EU-level, so it would be very strange if Germany had completely different rules to the other countries.
I agree with the others that getting professional advice from a tax consultant is the best thing to do. Your local tax office should also be able to give you basic information such as this for free.

Christine


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Claudia J.
United States
Local time: 01:01
German to English
+ ...
TOPIC STARTER
no difference between goods and services Oct 25, 2007

I was told by the local tax office that there is no difference between goods and services. services are treated as a good delivered.


so then this rule would also apply to translations.


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Steffen Walter  Identity Verified
Germany
Local time: 07:01
Member (2002)
English to German
+ ...
Ignorance on the part of your tax office? Oct 25, 2007

clawitter wrote:
I was told by the local tax office that there is no difference between goods and services. services are treated as a good delivered.


To me, this looks very much like ignorance on the part of your local tax office as services and goods are two entirely different things. As recommended before, I'd strongly suggest to get in touch with a Steuerberater in order to get a (well-founded) second opinion. As a matter of fact, translations are services not goods.

Steffen

[Edited at 2007-10-25 12:29]


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