Providing a UK VAT number to Spanish companies (when you're not VAT-registered)...
Thread poster: Sophie Paterson
Sophie Paterson  Identity Verified
United Kingdom
Local time: 07:24
Spanish to English
+ ...
Feb 9, 2011

I'm sorry if this has come up on previous posts; I tried searching but couldn't find what I was looking for.

This is mainly a question for UK-based translators who work for companies in Spain (possibly other countries):

Many clients have been asking me for a VAT number (5, 9 or 12 figures, letters + numbers) for the Spanish inland revenue people... My problem is that I am not VAT-registered in the UK as I earn under the threshold. I've been providing an interim tax reference number as a short-term measure, which worked initially... but now clients are coming back to me saying that the number isn't accepted.

Does anyone know what I can do about this? Have those with the same issue registered themselves for VAT? I tried ringing HMRC, but they just kept saying that I didn't need to register and not to let foreign companies force me into doing so!!

Thanks very much in advance, and sorry again if this is a repeat post.

Sophie


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MM^^  Identity Verified
Germany
Local time: 08:24
Chinese to French
+ ...
French law Feb 9, 2011

Hello,

As small undertaking of french law, I have not to bill the VAT. I show only my registration number as compagny on my invoices and the french provision excluding me from VAT. My customers are satisfied with that. Just one german compagny asked me to translate the french provision of the french tax code which excludes me from VAT.
I mean that your situation is similar.
Maiby the solution is to join the translation of involved provisions of the tax code.

[Modifié le 2011-02-09 13:22 GMT]

[Modifié le 2011-02-09 13:22 GMT]


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Manuela Junghans  Identity Verified
United Kingdom
Local time: 07:24
Member (2004)
English to German
+ ...
Hi Sophie Feb 9, 2011

I´m not sure what you mean by interim tax reference, but I would suggest you use your UTR (unique tax payers reference), which I think is 9 long.

I think to remember that in previous threads where this issue had been discussed this was agreed on to be accepted.

But let´s see what others have to say.

Manuela


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Barry Appleby  Identity Verified
United Kingdom
Local time: 07:24
Russian to English
+ ...
UTR Feb 9, 2011

Hi Sophie

Some thoughts.

Does not HMRC have a specialised VAT unit that can answer questions relating to VAT on intra-community transactions in the field of services? As them and get on to this unit.

For your information, I work for two Swedish clients and I quote my UTR number which is accepted by the Swedish Tax Authorities. If your UK tax number is an interim one, it may have expired, which would explain why it is no longer being accepted.

Hope this helps.
Barry


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Peter Shortall  Identity Verified
Local time: 07:24
Member
French to English
+ ...
Other discussions Feb 9, 2011

Apologies if you've already seen these, but in case you haven't:

http://www.proz.com/forum/business_issues/174532-intra_community_vat_number_is_it_necessary.html

http://www.proz.com/forum/money_matters/173296-vat_cant_issue_an_invoice_in_spain_without_vat_registration.html


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Sophie Paterson  Identity Verified
United Kingdom
Local time: 07:24
Spanish to English
+ ...
TOPIC STARTER
Thanks Feb 9, 2011

Thanks to you all for your comments and advice.

I did indeed mean my UTR number (sorry for the bad phrasing!), which I was recently using. I'll check to see how many digits it has, and whether it's expired (oh dear!).

Ok, well, thanks very much again for your time.

Best regards

Sophie


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Burrell  Identity Verified
United Kingdom
Local time: 07:24
Member (2004)
English to Latvian
+ ...
UTR Feb 9, 2011

I couple of years ago one of my clients insisted they needed my tax number. I called the Inland Revenue to ask if it is safe to give it out and was told that for all they care I can provide any 9 digit number to the said client - he would have no means of verifying it anyhow as UTRs are not provided to anybody but their rightful owners.

Chances are your client's accountant is not willing to change his/her ways. They believe you have to provide the VAT number because the accountant told them. I agree with MM - include the article from the relevant UK law in your invoice showing that you do not have to register for VAT. They cannot argue with that.

Ines


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Michael Wetzel  Identity Verified
Germany
Local time: 08:24
German to English
link with answer Feb 9, 2011

Hello Sophie,
The Asker in the second link offered by Peter finally came up with the answer. The UK and one or two other countries are exceptions to the general EU rule: these countries do not offer VAT numbers to VAT-exempt businesses.

In the link, you will find the correct phrases to write on your invoices for customers in other EU countries.

I don't know if that will really help your Spanish customers to properly report their Spanish VAT (which they really do have to pay for your services: it is not relevant that you are exempt within the UK). But this will apparently make your invoices legally correct.

If you are interested in understanding why this is so, try to sift through the previous discussions.

Sincerely,
Michael


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Sophie Paterson  Identity Verified
United Kingdom
Local time: 07:24
Spanish to English
+ ...
TOPIC STARTER
Thanks... again! Feb 9, 2011

Michael & Ines, thanks also to you for your comments!

I've been reading through the various posts and queries you've all indicated, and it's becoming clearer now.

As a side note, my UTR is 10 digits, whereas my National Insurance is 9. So I'll think I'll try that as well.

Ok, back to work it is!

Regards

Sophie


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xxxS P Willcock  Identity Verified
Local time: 09:24
German to English
+ ...
thanks for all the tips Feb 10, 2011

I am currently embroiled with this one as well, since in December I did a rush job for a Spanish client and find that I have not been able to invoice them to their satisfaction ever since.

I had considered simply writing it off and not taking up their offer of further work - especially because of the 60-day payment term, when I am used to clients paying with 14 to 21 days - but I may persevere, thanks to this advice.

with thanks,
Samuel P W


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Maria Lila  Identity Verified
Germany
Local time: 08:24
French to Spanish
+ ...
Spanish Law Feb 10, 2011

Hi Sophie:

There's a lot of controversy regarding this issue, maybe knowing what happens in the other side can help a little bit.

Letting aside personal thoughts (or disagreements), according to Spanish Law is mandatory to work ONLY with VAT-registered professionals (in case we are hiring their services) within the EU, and to verify their EU-VAT number before starting a business relationship with them (through VIES). It is also mandatory for a Spanish company or freelance professional to be VAT-registered in order to trade within the EU.

I know cases in which colleagues failed into providing VAT-numbers of fellow translators and were fined. Having faced this issue a couple of months ago, I asked Spanish colleagues what to do, as I don't feel comfortable asking someone to register if s/he is not obliged to, and I fully agree that red tape doesn't help to improve productivity and business relationships. And there's nothing that can be done. I cannot accept invoices from unregistered professionals.

Your UTR or Insurance # is not valid. Your VAT # must be GB + 5/9/12 digits, you receive it after registration. It takes a time and you would be requested to fill in quaterly VAT forms. So the decision is up to you. You may consider it if dealing with Spanish companies represent a considerable part of your income.

@Samuel:
I'm very sorry about your experience. This agency should have warned you about this issue before sending a PO, especially if they keep assigning you jobs.
Some Spanish colleagues have even pointed out the particular issue about Spanish Tax Authorities asking businesses and professionals to act as "Tax Supervisors". But we cannot do otherwise...

Best,

María Lila.


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Michael Wetzel  Identity Verified
Germany
Local time: 08:24
German to English
VAT exempt with vs. without VAT number Feb 10, 2011

Hello María,
VAT-exempt translators in most EU countries can simply get a VAT number from their tax authorities, add it to their invoices, and avoid this problem.

The UK and a few other countries received a special exemption from this rule, which makes the situation a little more complicated for them and their clients.

A convincing solution to the problem seems to be presented in the course of several entries on the second page of a discussion mentioned above:
http://www.proz.com/forum/money_matters/173296-vat_cant_issue_an_invoice_in_spain_without_vat_registration.html

On the invoice, the translator needs to name the relevant laws to show: (1) that the reverse-charge procedure applies, (2) that the EU directive contains an exception for some countries, (3) the national law (UK or otherwise) that applies to the specific translator.

The forum discussion lists the appropriate statements that a major Spanish outsourcer suggested for (apparently) fulfilling these requirements.

Does the solution provided there look convincing to you?

Sincerely,
Michael


Added: María, thanks a lot for responding. It doesn't affect me personally, because I opted to pay VAT and live in Germany anyway, where it is possible to get a VAT number without paying VAT. However, the issue seems to be causing a lot of people trouble. Of course you're right that even if this solution is legally correct, this does not mean it will be accepted by a particular official.

[Bearbeitet am 2011-02-10 20:32 GMT]


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Maria Lila  Identity Verified
Germany
Local time: 08:24
French to Spanish
+ ...
Convincing Spanish Tax authorities Feb 10, 2011

Hi Michael,

Unfortunately it's not me who needs to be convinced, but Tax Office. The proposed solution seems sensible, however, when you call their VAT dept., they claimed it's not acceptable. And there's a point in which you feel completely lost in the tax system.

There has been a lot of problems with Spanish companies due to this problem. I would be delighted to hear if the proposed solution worked out. I'll try to phone again and update this post.

Best, María Lila.


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Williamson  Identity Verified
United Kingdom
Local time: 07:24
Flemish to English
+ ...
VAT-paranoia Feb 11, 2011

It is not up to the translator living outside Spain to pay taxes to the Spanish VAT-administration. It is the end-customer in Spain, who has to pay VAT if the supplier is not VAT-registered (due to a high threshold). Since when do Spanish businesses have to play the role of tax-collector of a foreign national, living outside Spain.



[Edited at 2011-02-11 19:18 GMT]


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