VAT clause
Thread poster: SuzyKeller

SuzyKeller  Identity Verified
France
Local time: 09:59
Member (2015)
English to French
+ ...
Jun 17, 2015

Hi all !

I have recently estbalished myself as a freelance translator in Barcelona.
I have a VAT number and I was told that VAT only applied for clients based in Spain.
So when I issue an invoice to a Spain-based client, I always apply the VAT, however when I issue an invoice to a foreign client, should I add a clause saying that I do not have to apply the VAT?

I am a bit lost...

Many thanks for your help!


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
VAT Jun 17, 2015

Here is what I explain on my own website and what my German accountant has confirmed:

VAT Information
Value-added tax is not due in the following cases:
1. if you are a business domiciled in the European Union's VAT area except Germany, and on condition that you present your VAT number (reverse VAT charging),
2. if you are a consumer or business domiciled outside the EU's VAT area.

In place of Germany, you just apply Spain.

So you bill VAT to all clients in Spain and all clients without a VAT number in the EU's VAT area (careful, not exactly the same as the EU): http://ec.europa.eu/taxation_customs/resources/documents/customs/procedural_aspects/general/sadguide/1619-08annexI_en.pdf


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Jan Truper
Germany
Local time: 09:59
Member (2016)
English to German
+ ...
clause for VAT reversal Jun 17, 2015

I second what Thomas is saying.

My German tax expert also told me to put the term "VAT reversed" on all invoices to clients that fall under Thomas' case No 1.


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 08:59
Member (2014)
German to English
+ ...
Easy solution Jun 17, 2015

I have to apply VAT in the UK but not for other EU countries. On my invoices, I just replace the VAT charge with a line that reads:

VAT reverse charge (0%): 0.00

So, for example, if my UK invoice reads:

Subtotal: GBP 200.00
VAT (20%): GBP 40.00
Total: GBP 240.00


My non-VAT invoice would read:

Subtotal: EUR 200.00
VAT reverse charge (0%): 0.00
Total: EUR 200.00


Works for me and my accountant is happy with it!


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 08:59
Member (2014)
German to English
+ ...
By the way... Jun 17, 2015

Make sure you include both your VAT number and your clients' VAT numbers on the invoices -- otherwise VAT would need to be charged to your client even outside of Spain.

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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
Only in the EU's VAT area Jun 17, 2015

Angela Rimmer wrote:

Make sure you include both your VAT number and your clients' VAT numbers on the invoices -- otherwise VAT would need to be charged to your client even outside of Spain.


Outside of Spain if a private client (or business client without VAT number, but a business client is supposed to obtain a VAT number for cross-border transactions) but only if it's in the EU's VAT area.

No client outside the EU's VAT area pays VAT on translations ever, private or not.


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 08:59
Member (2014)
German to English
+ ...
Correct Jun 17, 2015

Thomas T. Frost wrote:

Angela Rimmer wrote:

Make sure you include both your VAT number and your clients' VAT numbers on the invoices -- otherwise VAT would need to be charged to your client even outside of Spain.


Outside of Spain if a private client (or business client without VAT number, but a business client is supposed to obtain a VAT number for cross-border transactions) but only if it's in the EU's VAT area.

No client outside the EU's VAT area pays VAT on translations ever, private or not.


Sorry, I guess I didn't make that clear, of course I was only talking about clients within the VAT area. My point was only that all VAT numbers must be on your invoice, whether you are charging VAT (to a business based in Spain, in this case) or not (businesses based within the VAT area but not in Spain). That includes your VAT number and the client's.


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
VAT numbers Jun 17, 2015

Angela Rimmer wrote:

My point was only that all VAT numbers must be on your invoice, whether you are charging VAT (to a business based in Spain, in this case) or not (businesses based within the VAT area but not in Spain). That includes your VAT number and the client's.


It's only necessary to put the client's VAT number on the invoice if you don't charge VAT because of the reverse VAT charging procedure, and that's for fraud protection reasons, as the tax services in both countries must be able to trace who is supposed to account for the VAT. In Germany, I have to report all the VAT numbers and amounts for which I have used the reverse procedure with every VAT declaration. This information is passed on to the tax services in the clients' countries so they can verify the VAT is accounted for. I also have to verify these VAT numbers in the VIES system and keep the proof of verification.

If you bill VAT to a client in the same country, you just put your own VAT number on the invoice but not the client's. When you collect VAT, there is no risk of VAT not getting paid; hence no need for the client's VAT number.


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
VAT reversed Jun 17, 2015

Jan Truper wrote:

My German tax expert also told me to put the term "VAT reversed" on all invoices to clients that fall under Thomas' case No 1.


Indeed. My invoice skeletons are trilingual, so I put

"Reverse VAT charge/Auto-liquidation de TVA par preneur/Steuerschuldnerschaft des Leistungsempfängers"

where VAT otherwise goes.

Germans are usually considered environmentally conscious, but has anyone calculated the environmental cost of their very long words and sentences? They need to fell more trees to get more paper to write the same things, and they need more computer storage for them, using more materials and electricity and causing more waste


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SuzyKeller  Identity Verified
France
Local time: 09:59
Member (2015)
English to French
+ ...
TOPIC STARTER
Thank you! Jun 18, 2015

Thank you very much to all of you for these answers, this is very helpful

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