Residence certificate demanded from EU registered company by a Greek agency
Thread poster: Krisztina Lelik

Krisztina Lelik  Identity Verified
Greece
Local time: 18:01
Greek to Hungarian
+ ...
May 18, 2016

I have received this e-mail from a certain translation agency from Athens:

"I would like to inform you that for your payment and on we need to send us a residence certificate from the tax office which certify that you are resident of your country during the calendar year 2016 with the meaning of the double taxation convention between Hellenic Republic and your country for the year 2016.
Please find attached the claim for the application of the double taxation that you have to fill in and be sign by you and your tax authorities.
Please note that is highly important to have this document for your payment without this certificate we are obliged to deduct fees 20% for the tax office."

The point is that I have a registered company (LP) in Hungary (which is also an EU member state), with valid European tax number that can be checked in VIES, my invoices are issued by this company in Budapest, I have proved with different documents that the company is established in Hungary and exists since 1993.
They want to deduct 20% (!) for the "tax office" - which one exactly and why 20%?
As far as I know if you buy a service from another country (especially within EU) you don't need any certificate attached to the invoice.

Isn't it a breach of the principle of free movement of goods and the freedom to provide services laid down in the EC Treaty?

I work for many different Greek agencies, and this is the only one that asks for such a nonsense paperwork. The question is if this is the one and only Greek company that knows really the Greek legislation or this is the most stupid that cannot understand the difference between registered companies and freelance individuals plus has no idea that Greece is still a member state of the EU?


[Edited at 2016-05-18 15:28 GMT]


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Michael Joseph Wdowiak Beijer  Identity Verified
United Kingdom
Local time: 16:01
Member (2009)
Dutch to English
+ ...
I worked for them too, but never again! May 18, 2016

Krisztina Lelik wrote:

I have received this e-mail from a certain translation agency from Athens:

"I would like to inform you that for your payment and on we need to send us a residence certificate from the tax office which certify that you are resident of your country during the calendar year 2016 with the meaning of the double taxation convention between Hellenic Republic and your country for the year 2016.
Please find attached the claim for the application of the double taxation that you have to fill in and be sign by you and your tax authorities.
Please note that is highly important to have this document for your payment without this certificate we are obliged to deduct fees 20% for the tax office."

The point is that I have a registered company (LP) in Hungary (which is also an EU member state), with valid European tax number that can be checked in VIES, my invoices are issued by this company in Budapest, I have proved with different documents that the company is established in Hungary and exists since 1993.
They want to deduct 20% (!) for the "tax office" - which one exactly and why 20%?
As far as I know if you buy a service from another country (especially within EU) you don't need any certificate attached to the invoice.

Isn't it a breach of the principle of free movement of goods and the freedom to provide services laid down in the EC Treaty?

I work for many different Greek agencies, and this is the only one that asks for such a nonsense paperwork. The question is if this is the one and only Greek company that knows really the Greek laws or this is the most stupid that cannot understand the difference between registered companies and freelance individuals and has no idea that Greece is still a member state of the EU?


I jumped through all of their hoops (re the certificate of residence for tax purposes) in order to get them to pay my first invoice. I was then stupid enough to take on another job, and since it was by then a different year, they wanted me to provide them with a brand new tax residence certificate. However, the first one involved many long phone calls to HMRC, emails, and waiting, and so I refused to go through all the trouble again. I gave them a bad rating on the Blue Board, and told them they could keep my money. In the end (as far as I can remember), they basically said sth along the lines of: we will pay you if you retract your negative feedback on the Proz.com Blue Board, which I did, as getting paid is more important to me than ethical standards.

They are the only company I have ever worked for in my life that have requested such a thing, so, no matter how much the protest (and insist that it is required by law), they simply must be mistaken.

Michael

[Edited at 2016-05-18 12:59 GMT]


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Steffen Walter  Identity Verified
Germany
Local time: 17:01
Member (2002)
English to German
+ ...
EU VAT IDs May 18, 2016

Both Greece and Hungary are EU member states, which is why VAT IDs of the respective countries (as can be checked in VIES) should be sufficient for all intents and purposes. I would refuse to work for any client/outsourcer adopting a stance similar to that of this Greek agency.

Steffen


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Josephine Cassar  Identity Verified
Local time: 17:01
Member (2012)
Italian to English
+ ...
Received from Italy too May 18, 2016

I was asked to submit a residence certificate to a Greek company too-don't know if it is the same company you are talking about- and they said it was because of this was an EU tender but I found it was too much hassle so refused and did not accept work from them. Pity, as it was a very good rate and always on the go. But after having done some work for an agency in Italy last year, I received an email last January where I was asked to submit a residence certificate for the year 2015 which showed I was living and paying taxes in my country. I answered that they should have asked for this form before and did not submit as it was too much hassle and now make it clear that I should be asked any forms needed before not after.

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Teresa Borges
Portugal
Local time: 16:01
Member (2007)
English to Portuguese
+ ...
This has nothing to do with the EU, May 18, 2016

but with the treaty for the avoidance of double taxation (http://ec.europa.eu/taxation_customs/taxation/individuals/treaties_en.htm) and has been discussed several times:
http://www.proz.com/forum/money_matters/49092-double_taxation_document_help.html
http://www.proz.com/forum/money_matters/267770-fiscal_residence_certificate.html


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
Double tax agreements May 18, 2016

Teresa Borges wrote:

This has nothing to do with the EU, but with the treaty for the avoidance of double taxation


"The treaty"? Which one? Such treaties are bilateral, and there are thousands of them.

Most of them are quite clear on self-employment only being subject to tax in the country where the work takes place, and I'm yet to see one that says any certificates are required in order for such treaties' provisions to be applied.

The EU comes into the picture because we've been told for 23 years about a so-called Single Market without internal frontiers, and with free movement of goods, people, services and capital, so such bureaucratic obstacles to the free movement actually breach the fundamental principles of the EU, even if the EU is not competent on the matter of income tax.

The EU also comes into the picture because the VIES system already makes it possible to verify where a business is VAT-registered, and although VAT is not income tax, a VIES entry should still provide reasonable evidence of where a business is registered, unless one is paranoid and can never get paper, certificates, filled-in forms, official stamps, sworn statements and affidavits enough. And that's sometimes how things are in parts of southern Europe, where you sometimes feel you are perpetually suspected if you're involved in business, unless you can keep proving your innocence. And even if you play with open cards and provide all the red tape required, they still often suspect you must be hiding something.

In any case, I would not spend my own time on such bureaucratic paranoia but ask for compensation at my normal, hourly rate plus all actual expenses.

It's important to ask new clients up front about any bureaucratic requirements, withholding tax or capital controls. One can also ask the client to specify exactly which article of which law requires such a certificate. If they have to pay for it, they may think twice before insisting.


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Steffen Walter  Identity Verified
Germany
Local time: 17:01
Member (2002)
English to German
+ ...
EU vs. double taxation May 19, 2016



Thank you for providing these links to previous forum discussions (the first is from 2006 [!], by the way, and the second involves a US resident, as opposed to intra-EU dealings), but I stand by my comment that this argument is moot within the confines of the EU with its VAT ID system (serving as proof that you operate a tax-registered business in your country of residence) and the reverse-charge procedure introduced a long time ago.


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Residence certificate demanded from EU registered company by a Greek agency

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