UK resident invoicing Italian company for assignment in Italy Thread poster: Tiziana Zanirato
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Hello everybody,
I hope you are all doing well!
I have recently been asked to take up a casual assignment in Italy by an Italian company. The assignment will be 2/3 weeks long. As far as I know if I reside in the UK for more than 183 days in a tax year I should still declare my foreign income in the UK (without notifying Italian tax authorities). In this case I will issue an invoice according the UK's law (no VAT).
May I ask you to confirm this information?... See more Hello everybody,
I hope you are all doing well!
I have recently been asked to take up a casual assignment in Italy by an Italian company. The assignment will be 2/3 weeks long. As far as I know if I reside in the UK for more than 183 days in a tax year I should still declare my foreign income in the UK (without notifying Italian tax authorities). In this case I will issue an invoice according the UK's law (no VAT).
May I ask you to confirm this information? If you have different information, please let me know.
Thank you ▲ Collapse
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| Tax and social security | Mar 31, 2018 |
1. Tax:
UK/ITALY DOUBLE TAXATION CONVENTION
SIGNED 21 OCTOBER 1988
Entered into force 31 December 1990
Effective in United Kingdom from 1 January 1991 for petroleum revenue tax, from
1 April 1991 for corporation tax and from 6 April 1991 for income tax and capital
gains tax
Effective in Italy ... See more 1. Tax:
UK/ITALY DOUBLE TAXATION CONVENTION
SIGNED 21 OCTOBER 1988
Entered into force 31 December 1990
Effective in United Kingdom from 1 January 1991 for petroleum revenue tax, from
1 April 1991 for corporation tax and from 6 April 1991 for income tax and capital
gains tax
Effective in Italy from 1 January 1991
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/498371/italy-dtc_-_in_force.pdf
ARTICLE 14
Independent personal services
(1) Income derived by a resident of a Contracting State in respect of professional services
or other activities of an independent character shall be taxable only in that State unless he
has a fixed base regularly available to him in the other Contracting State for the purpose
of performing his activities. If he has such a fixed base, the income may be taxed in the
other State but only so much of it as is attributable to that fixed base.
(2) The term "professional services" includes especially independent scientific, literary,
artistic, educational or teaching activities as well as the independent activities of
physicians, lawyers, engineers, architects, dentists and accountants.
So as long as you don't move to Italy, you only have to declare this income in the UK. As for VAT, you would use the reverse charging if you are VAT registered.
2. Social security
Have a look at this EU guide:
https://europa.eu/youreurope/citizens/work/unemployment-and-benefits/country-coverage/index_en.htm
You may or may not have to ask for a form to certify that you are covered in the UK.
183-day rule: it seems to be a bit of a myth that the answer to questions like this can be found exclusively by applying a 183-day rule, but that's not true. While EU Regulations for the coordination of social security and many so-called double-tax agreements do refer to such a criterion, it is only one criterion out of many, and not necessarily the first to be taken into consideration.
Many countries have bilateral tax agreements between them to settle such questions. They are easily found on the Internet.
In the EU, the EEA and Switzerland, the coordination of social security rights and contributions is regulated by the EU. When other countries are involved, one needs to check if there is a bilateral social security agreement. ▲ Collapse
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| how does reverse charge works? | Apr 2, 2018 |
Hi Thomas, thank you very much for your reply. I am not currently registered for VAT but from what I understand I will have to if I want to keep on working with that client with some frequency. Would you mind explaining how the reverse charge would work for me?
Thank you
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| Reverse charge | Apr 3, 2018 |
Reverse charge means that it is the client that charges VAT in their own country, not the supplier, which invoices the service exclusive of VAT.
The supplier must validate the client's VAT number in the EU's VIES system to ensure it is genuine and combat fraud. Evidence of the validation must be kept.
The supplier must mention the client's VAT number on the invoice.
If you are not VAT registered, I'm not sure what you are expected to do. There have been man... See more Reverse charge means that it is the client that charges VAT in their own country, not the supplier, which invoices the service exclusive of VAT.
The supplier must validate the client's VAT number in the EU's VIES system to ensure it is genuine and combat fraud. Evidence of the validation must be kept.
The supplier must mention the client's VAT number on the invoice.
If you are not VAT registered, I'm not sure what you are expected to do. There have been many Proz debates about it, because guidelines are unclear. I don't think the VAT exemption was intended to cover cross-border business in the first place.
Once the UK has left the EU, there will hopefully be no more confusion. ▲ Collapse
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Thank you for your reply. I will think about what is better to do in this case.
Have a good week
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Tom in London
United Kingdom
Local time: 16:51
Member (2008)
Italian to English
You're not actually leaving the UK. You'll only be in Italy for 2-3 weeks.
I am often in Italy for 2-3 weeks, and when I'm there, I work.
But I'm still based in the UK.
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| Your title sayq it all | Apr 9, 2018 |
In view of the fact that you are to spend a couple of weeks in Italy, and you state that you are " "UK resident invoicing and Italian company", you don't need to do anything special.
Edit: you might like to check various insurance matters though. If you break something when working at the client company's site, are you covered? If you are injured while travelling to the site, are you covered? By whom? In what circumstances? If something serious happens to you or to someone's proper... See more In view of the fact that you are to spend a couple of weeks in Italy, and you state that you are " "UK resident invoicing and Italian company", you don't need to do anything special.
Edit: you might like to check various insurance matters though. If you break something when working at the client company's site, are you covered? If you are injured while travelling to the site, are you covered? By whom? In what circumstances? If something serious happens to you or to someone's property when you are acting in a professional capacity, you need to be sure that you are covered for that professional context.
[Edited at 2018-04-09 22:08 GMT] ▲ Collapse
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