When do I charge VAT?
Thread poster: Encarnación Macarena Villa Cubas

Encarnación Macarena Villa Cubas  Identity Verified
United Kingdom
Local time: 00:59
English to Spanish
+ ...
Apr 17, 2013

Dear colleagues,

I kindly request some help.
I need to invoice for a job translation and I’m not sure whether to charge VAT (IVA in Spain) or not.
I’m based in London and registered self-employed -got my unique tax number-, which allows me to enter in business and generate profits of up to 79,000 pounds without having to apply for a VAT number.
Do you ever charge VAT (IVA in Spain) to your clients on top of the agreed price?
Any help will be much appreciated.
Kind Regards


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neilmac  Identity Verified
Spain
Local time: 01:59
Spanish to English
+ ...
Spain is different Apr 17, 2013

In Spain, where I'm based, most translations are subject to IVA (I bill it as 21% on top of the gross amount and also bill the clients IRPF, which is also 21% now, so my net sum is the same as the gross).
As far as I know, literary works and scientific research papers etc are VAT free (IVA exento según ley 37/1992 del Diciembre, Art. 20.1.9) - unless they've changed the rules.

I don't know how it all works in the UK though.


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Encarnación Macarena Villa Cubas  Identity Verified
United Kingdom
Local time: 00:59
English to Spanish
+ ...
TOPIC STARTER
Thank you Apr 17, 2013

Dear Neil,

Many thanks for taking the time to answer my question. It's much appreciated.

Kind Regards
Macarena


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564354352  Identity Verified
Denmark
Local time: 01:59
Danish to English
+ ...
No VAT charged between EU countries Apr 18, 2013

As far as I am aware, you should not charge any VAT at all to clients in other EU countries.

Obviously, if you are not VAT-registered in the UK, you won't be charging VAT to UK clients, either.

As for EU clients, you probably need to have THEIR VAT no. and include that on your invoice (you may have to pass that information on to the tax authorities?), but you still don't charge them any VAT.

The rules for charging VAT within any EU country vary. For instance, in Denmark you have to be VAT-registered if you earn more than DKK 50,000 per year, which basically means that any full-time translator will have to be VAT-registered, and we charge 25 % on all work that we carry out for clients based in Denmark.

I am, however, curious to know what UK-based translators do with clients outside the EU? If I bill somebody outside the EU and the final translation is to be used in Denmark, then I have to charge them 25 % VAT (they don't like this, I assure you, but such are the rules in my country). What are the rules in the UK?


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Samuel Murray  Identity Verified
Netherlands
Local time: 01:59
Member (2006)
English to Afrikaans
+ ...
Yes, there is VAT between EU countries Apr 18, 2013

Gitte Hovedskov Hansen wrote:
As far as I am aware, you should not charge any VAT at all to clients in other EU countries.


If you buy or sell something between two EU countries, there is VAT, unless both buyer and seller is registered for VAT, in which case they can "shift" the VAT (which in practice usually means that neither pay any VAT, but both have to declare the VAT-able amount).

If you buy something and you don't tell the seller your VAT number (or if you don't have a VAT number), or vice versa, then the situation is more complicated, and it may differ from country to country.

As for what you should do, I think you should just tell the agency that in the UK you are not required to be VAT registered to run a business, as long as some requirements are met, and that their accounting department should contact their own tax expert to figure out whether they need to pay any thing extra to their own country's tax department. That's just what I would do.


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564354352  Identity Verified
Denmark
Local time: 01:59
Danish to English
+ ...
I stand corrected Apr 18, 2013

Thanks, Sam, for pointing this out. I apologise for confusing matters with my Danish (VAT-registered perspective).

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Encarnación Macarena Villa Cubas  Identity Verified
United Kingdom
Local time: 00:59
English to Spanish
+ ...
TOPIC STARTER
When do I charge VAT? Apr 18, 2013

Many thanks, Sam & Gitte. I guess this is a matter I need to investigate thoroughly.

Whenever I’ve contacted my VAT office they always make the same question: Are your gains over £79,000 a year? If not, you don´t need to be VAT registered.

However, in their website, I found out that I could decide to be VAT registered voluntarily even though I don’t exceed the threshold and that this could bring me some cash-flow related benefits.

I need to investigate this a little bit more. When I have accurate information I’ll post it here.

Again, many thanks for your help.


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Lords  Identity Verified
Mexico
Local time: 17:59
Member (2010)
English to Spanish
+ ...
As far as it goes here we do not have to collect IVA, if only if. Apr 18, 2013

Dear Encarnación Villa Cubas

I live in Mexico, and as far as I know you do not have to collect or pay IVA, if the jobs is not for a local (mexican company). However, when we have to fill in our income tax (for foreign translations) we have to pay other local taxes.


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When do I charge VAT?

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