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Invoicing a VAT exempted client
Thread poster: Claire C

Claire C
Netherlands
Local time: 12:08
English to French
+ ...
Jan 21, 2013

Dear colleagues,
I have a question concerning the VAT.
I work as an independent translator in the Netherlands. A month ago, I have done a translation work for an international agency based in France.
This organisation is exempt from VAT.
What does this mean for me? Should I invoice 0% VAT? But then, is there a special reference that I should quote on the invoice (number, …)?
My accountant tells me that I should quote their VAT number in France and charge 0%, and that if I do not quote any VAT number, I should charge 21%.
But my client tells me that they do not have a VAT number and that I should not charge them any VAT… :s
Does someone know about this? Thank you!!!


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Hazel Underwood  Identity Verified
United Kingdom
Local time: 11:08
Member (2005)
German to English
+ ...
0% VAT Jan 21, 2013

Hi Claire,
As far as I am aware you have to charge VAT if your client is unable to provide a VAT number (in which case you can zero rate the VAT).
That's the situation in the UK anyway.
I would probably contact your local tax office to be sure.
Kind regards,
Hazel


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David Wright  Identity Verified
Austria
Local time: 12:08
German to English
+ ...
why should an international agency be VAT exempt? Jan 21, 2013

Anyone doing business in the EU is subject to VAT unless their turnover is below a certain threshold. There is an exemption for charities (is that what this is?). They do not charge VAT. If they are a registered charity, they can be exempt from paying VAT, but they must provide the vendor (i.e. the asker here) with the details of their registration as a charity. You can then invoice them free of VAT and enter the details of the registration on the invoice. While what I have just said basically applies to the UK, VAT is largely governed by EU rules, so I would suspect that that is true for France to a large extent too.

OR: Is your international agency one of those UN bodies that enjoy extraterritorial status? These may also be exempt from VAT under international agreements but you would need to check this.


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Sheila Wilson  Identity Verified
Spain
Local time: 11:08
Member (2007)
English
+ ...
Recent discussion Jan 21, 2013

I don't know how relevant this is, but I remembered it being discussed so I've tracked down the link:
http://www.proz.com/forum/money_matters/223085-vat_or_no_vat_intracommunitary_invoice_with_non_vies_ngo.html


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Lennart Luhtaru  Identity Verified
United States
Member
English to Estonian
+ ...
VAT Jan 22, 2013

1) Get a VAT number from them, check if it's valid in VIES and if it is, then invoice with 0% VAT

----
Goods supplied between taxable persons (or VAT registered traders) are exempted with a right to deduct the input VAT (zero-rated) on despatch if they are sent to another Member States to a person who can give his VAT number in another Member State. This is known as an "intra-Community supply". The VAT number can be checked using the VAT Information Exchange System (VIES).
-----

More http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm
VIES http://ec.europa.eu/taxation_customs/vies/

2) If they cannot provide you with a VAT number, invoice with your local VAT rate (21%).


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Mohamed Mehenoun  Identity Verified
Algeria
Local time: 11:08
Member (2008)
English to French
+ ...
reversed VAT Jan 22, 2013

I think you should put this mention on your invoice and pay the VAT but I'm not sure...

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Maaike van Vlijmen  Identity Verified
United Kingdom
Local time: 11:08
Member (2009)
Italian to Dutch
+ ...
charge VAT Jan 22, 2013

Hi Claire,
I had the same problem two years ago when I was still living in the Netherlands. I had an Italian client who was exempt from VAT. In the end, the Belastingdienst told me I had to charge this client VAT (which is now 21%, right?).
Hope this helps.


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Paul Skidmore  Identity Verified
Germany
Local time: 12:08
German to English
establish the exact status of your client Jan 22, 2013

Without knowing exactly who your client is, it is impossible to give any definitive advice.

As David has pointed out, as a result of international agreements, certain international organisations are exempt from VAT and do not have VAT numbers.

Article 151(1)(b) of the EU VAT Directive makes provision for these organisations.

As an example, see the information provided by ITER

http://www.iter.org/org/team/adm/proc/iterprivileges

You should check with your client on their status and if they are, indeed, exempt, check with your accountant or the Dutch tax authorities on the appropriate wording to be used on your invoices.

HTH Paul


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