Invoicing a VAT exempted client
Thread poster: Claire C
| | Claire C
Local time: 05:04
English to French
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My accountant tells me that I should quote their VAT number in France and charge 0%, and that if I do not quote any VAT number, I should charge 21%.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!!!
| | David Wright
Local time: 05:04
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.
| | Sheila Wilson
Local time: 04:04
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).
2) If they cannot provide you with a VAT number, invoice with your local VAT rate (21%).
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.
| 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
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.