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New client wants VAT number. What do I do?
Thread poster: Crystal Samples

Crystal Samples  Identity Verified
United States
Local time: 17:48
French to English
+ ...
Dec 27, 2007

Dear colleagues,

A company in Spain wants to hire me for a big job (20,000 words) to be completed by January 7th. They sent a questionnaire and some literature on their invoicing practices. The questionnaire asks for my VAT number and the literature says I need to put it on the invoice I send.

I don't have a tax number yet since I've only been invoicing since October, most of my translation experience up to then being in-house. I was planning on getting a tax number by the end of January before I filed my taxes. However, what can I tell this agency now? Should I tell them that I'll give them my tax number when I send my invoice, since I should have a number by then ? Do they need the tax (VAT) number to issue the P.O.?

I've worked with several agencies since October, and none of them have asked for it, so I'm wondering how crucual it is. However, I don't want to lose this client, so I want to comply with them.

What do you think I should do? I appreciate any advice you can give.

Best Regards,
Crystal Samples


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Steven Capsuto  Identity Verified
United States
Local time: 18:48
Spanish to English
+ ...
Not required for contractors in the U.S. Dec 27, 2007

This applies only to European contractors. Just mark it as "N/A" on the form and omit it from your invoices. If they've dealt with suppliers outside the E.U. before, they'll know not to expect it from you. You might want to mention it to them when you send back the form, though.

[Edited at 2007-12-27 16:23]


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Crystal Samples  Identity Verified
United States
Local time: 17:48
French to English
+ ...
TOPIC STARTER
taxpayer's code Dec 27, 2007

Thanks for the advice. I'll put N/A on the questionnaire (since that's all I can put anyway) but I'm afraid they may want some kind of tax information, even if it's not a VAT. In their "Terms of Collaboration" they have specified the following:


Invoices must ALWAYS contain:
1) your full name
2) your NIF/CIF (or equivalent taxpayer’s code in your country or VAT number)
3) full address (including the country)
4) reference and amount of each assignment
5) total amount
6) bank name + branch number + address
7) IBAN and SWIFT codes (VERY IMPORTANT)



4. TAX CERTIFICATE:
In accordance with article 43 of the new Spanish General Tax Law (Law 58/2003 of 17 December 2003), in order to work with us, you must send us a specific certificate proving that you are up to date with your tax payments (“certificado específico de encontrarse al corriente de sus obligaciones tributarias"). This can be obtained from the Spanish National Tax Administration Agency (Agencia Estatal de Administración Tributaria - AEAT) or online, and is valid for 12 months. You can send it by post or e-mail it to us (please ensure the verification code is on it).



Now, I can get past the "tax certificate" requirement since 1) I'm not in Spain and 2) I have not been invoicing long enough to have paid taxes. However, they still might want some kind of number. My sister, a junior accountant, says that they may be talking about an EIN.

Would they require such a thing? I did some work for an agency in France a little while ago, and they didn't ask me for a VAT or anything equivalent to it, so is this something particular to Spain?

Thanks for the help!

Crystal Samples


[Edited at 2007-12-27 16:59]


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Parrot  Identity Verified
Spain
Local time: 00:48
Member (2002)
Spanish to English
+ ...
Spanish Tax Certificate only applicable to residents in Spain Dec 27, 2007

and VAT number is NOT equivalent to NIF/CIF. The Tax Administration has been clarifying this requirement for some time now, but a VAT number is required of purchasers, not vendors. There was a long-drawn out debate about this, but it seems the definition of "intra-community operators" (who need a VAT number) is only applicable to merchandise traders and does not extend to service providers.

I'm a bit pressed for time right now, but maybe someone else can provide the OJEC link for this...

In a nutshell, maybe you'd better ask them to get their requirements straight considering your country of residence.


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Ramon Somoza  Identity Verified
Spain
Local time: 00:48
Member (2002)
Dutch to Spanish
+ ...
No tax certificate nor CIF/NIF required Dec 28, 2007

NIF/CIF is a Spanish fiscal identifier (and it is NOT equivalent to a VAT number - you may have a NIF and never charge VAT). NIF is for persons, CIF is for the fiscal identification of companies. Given that it is only applicable in Spain, you are not obliged to have that.

The tax certificate is only required for people working in Spain, I have to ask for it routinely every time I start working with a company in Spain, but obviously it does not apply to you.

They may ask for a VAT number if you work in the EU, given the current VAT laws in the EU, but given that you are in the US I believe this is not applicable in your case (unless you had to apply VAT, which I strongly doubt - I do not have to charge VAT to my US customers).

I suggest you kindly inform them that this information is not required from you because you live and work in the US.

In any case, I suggest you get a tax ID as soon as possible, the tax people in all countries frown about people doing business without proper tax IDs, independently of whether you pay your taxes or not. Keep in mind that the tax office uses the tax IDs as a means to control whether people are declaring or not their whole income... so it is risky to work without one, at the very least you risk an inspection, in some countries you may even be fined (don't know about the US, though).





[Editado a las 2007-12-28 17:51]


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MariusV  Identity Verified
Lithuania
Local time: 01:48
English to Lithuanian
+ ...
VAT ID or Tax Payer ID Dec 30, 2007

Maybe I am a little bit off topic, but I have one more semi-related question. In my country Tax Payer ID is one thing, and VAT ID is another thing. That means one (working like a free-lancer) gets VAT ID only when one registers as VAT payer (either on a voluntary basis, or on a mandatory basis when one reaches a certain turnover threshold defined by the laws).

Some time ago one agency also asked me to fill in certain forms (for their database) and there was a line to indicate VAT ID (a mandatory one to fill in). As I am not registered as a VAT payer, I only had Tax Payer ID and asked the person in charge what I shall do with the VAT ID. They replied "Sorry, but we are only interested in cooperation with those vendors who have VAT ID" (i.e. those who are VAT registered). I explained that a) the rates indicated are all-tax inclusive in any case and b) even me, being NOT a VAT payer, cannot add anything as all the amounts are not subject to VAT at all (not even "amount + 0 VAT" for the EU clients who are VAT-registered). They said again that a simple Tax ID is not sufficient and they cannot cooperate with me as they work with VAT-registered vendors only (kind of strange people – they find me offering a project, then send all those pages of online forms to fill in, all those test translations to do, and then they say “sorry, we cannot cooperate with you”).

Up till now I still cannot understand why they needed their possible vendor to be a VAT payer, i.e. what sense and what difference it makes in comparison to a simple Tax Payer ID...Can anyone explain that because I really do not understand that. Well, I'd still understand that if the vendor is a company (agency), well, almost all agencies have a big turnover to be under the mandatory VAT registration, but what about a free-lancer? For a free-lancer there is no need for VAT registration (voluntary) as it involves a lot of paperwork (at least those monthly VAT balances that are not so easy and cost money for the accountant), let alone a "+VAT" rate for the local clients (here VAT is 18 %). A translator (free-lancer) is not a trader - actually the income and expenses ratio is some 10:1 (what we buy to write off as expenses? At the very best it would be paper, software, office accessories and that is it)...


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Laura Tridico  Identity Verified
United States
Local time: 18:48
Member (2006)
French to English
+ ...
Seconding what Steven and Ramon said... Jan 1, 2008

Crystal, if you are based in the US you don't need a VAT number, nor would the Spanish agency care about your EIN. If they ask, just tell them you reside in the US and they don't have to be concerned about VAT in your case.

If you're operating as a sole proprietor in the US, you don't even need an EIN - your social security no. is sufficient.

Laura


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Request for a NIV from client Mar 10, 2011

I'm UK based and my non-VAT registered company entered into a contract with a Spanish Company. They are withholding their final payments to me for services provided, until I supply them with what they are calling a NIV/VAT number and saying it must be added it to my invoices.

As my company is not VAT registered, supplying that number would appear to be a non-starter. I have consulted with lawyers, accountants. I tried supplying a ten digit number, the unique Taxpayer Reference Number for my company and the spanish accounts department said it wouldn't do.

There is also the issue of 24% withholding tax - They aren't going to supply me with a certificate to demonstrate they have paid it to the Spanish Tax authorities without this mythical number.

Can I acquire a NIV number as a UK based non-VAT registered company and if I don't need to, how do I persuade them?

All advice welcome


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