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What is a "P.IVA comunitaria"?
Thread poster: simona dachille

simona dachille  Identity Verified
United Kingdom
Local time: 09:31
Italian to English
May 7, 2010

I have just been contacted by one of my Italian clients. I am self-employed based in the UK but work for Italian clients also. They have asked me to provide them with a P.IVA comunitaria which they say is a 9 digit number beginning with the initials GB. I do not have a VAT number as I am a small business. Does anyone know what this number they require is? It is not my tax reference number as this is not accepted by their computer system. Apparently this is a new law that has been issued in Italy. Can anyone shed some light on this matter and tell me what this number is and where I can find it?
TIA


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David Wright  Identity Verified
Austria
Local time: 10:31
German to English
+ ...
VAT ID No. May 7, 2010

I suspect you will have to register for VAT in the UK - but perhaps you should first ask the delightful people at the inland revenue

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Teresa Borges
Portugal
Local time: 09:31
Member (2007)
English to Portuguese
+ ...
As far as I know May 7, 2010

it is not a new law issued in Italy, but a new (since 1st January 2010) European Community directive...

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Williamson  Identity Verified
United Kingdom
Local time: 09:31
Flemish to English
+ ...
VAT and HMRC May 7, 2010

It is not a new law. P.IVA is the abbreviation of Partita IVA. : IVA or VAT.
Of course, you don't have a VAT-number.
The UK-VAT-treshold is about 70.000 euros yearly turnover at the current exchange rate. Your difficulty will be to explain that to the Italian customer. I suspect the treshold is much lower in Italy.
Have a look on HMRC-website: http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm Hope they understand.
Explaining the treshold to customers in high taxed and usually very bureacratic countries is not that easy.


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simona dachille  Identity Verified
United Kingdom
Local time: 09:31
Italian to English
TOPIC STARTER
Thank you May 7, 2010

After two hours spent on the phone to the various tax offices, the only thing they suggest doing is requesting in writing a letter from them confirming that I am taxable in the UK. If this does not satisfy my Italian client then I will have to look into opening a Partita Iva in Italy in order to be able to continue being paid by them.
The man at the Inland Revenue quite rightly said that they do not need a special number for me as I do not pay tax there.
Thank you all for the information, I will keep you posted on any other exciting revelations about the system.

[Edited at 2010-05-07 12:11 GMT]

[Edited at 2010-05-07 12:12 GMT]


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David Wright  Identity Verified
Austria
Local time: 10:31
German to English
+ ...
Why not register? May 7, 2010

I don't really understand the reluctance to register for VAT - it is as far as I know an option for all traders no matter what turnover, and means that you can reclaim the VAT on any expenditure for business purposes, especially out-sourced translations, but also your computer etc.

Any cross-border invoice between companies in the EU must now state the VAT ID No. of the issuer and the recipient of the invoice, otherwise VAT is payable on the amount in the recipient's country. However, as I said earlier, you need to find out from the VAT people (I now realise that that is Customs and excise in the UK) what to do in your situation.


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Sergei Tumanov  Identity Verified
Local time: 11:31
English to Russian
+ ...
some doubt here May 7, 2010

David Wright wrote:

I don't really understand the reluctance to register for VAT - it is as far as I know an option for all traders no matter what turnover, and means that you can reclaim the VAT on any expenditure for business purposes, especially out-sourced translations, but also your computer etc.
...


From practical point of view it also means that you have to pay VAT (in my case in Estonia it´s 20%) from ALL YOUR REVENUES.
I really doubt that my clients will accept 20% surplus on top of what I charge now.
Respectively, I will have to pay to the state these 20% out of my pocket.

[Edited at 2010-05-07 13:13 GMT]


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Natasha Dupuy  Identity Verified
France
Local time: 10:31
French to English
Existing thread May 7, 2010

Hi Simona,

Since you are in the UK, I suggest you read this very long thread on the subject:
http://www.proz.com/forum/money_matters/153466-eu_vat_changes_as_of_1_jan_2010.html

Happy reading!

Natasha


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Sergei Tumanov  Identity Verified
Local time: 11:31
English to Russian
+ ...
OR May 7, 2010

tell your Italian client the awful truth that they will not be able to reclaim any VAT from any amounts they pay you. They are ARE NOT ENTITLED to do this as you ARE NOT REGISTERED FOR VAT purposes.

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Giulia TAPPI  Identity Verified
France
Local time: 10:31
French to Italian
+ ...
In France May 7, 2010

This is not really new...

I have been working in France for almost 30 years and have been attributed a long time ago what is called "numéro d'identification intra-communautaire", starting with FR (so I undestrand it is GB for Great Britain), followed by 11 figures.

When you are in Italy, you have a "Partita IVA", but when you work abroad you have this European Identification.

I do not really understand how you may not have it; in France, if you work legally, you get it automatically.

Giulia


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David Wright  Identity Verified
Austria
Local time: 10:31
German to English
+ ...
Paying VAT May 7, 2010

"From practical point of view it also means that you have to pay VAT (in my case in Estonia it´s 20%) from ALL YOUR REVENUES.
I really doubt that my clients will accept 20% surplus on top of what I charge now.
Respectively, I will have to pay to the state these 20% out of my pocket." (Sergei)

If your clients are businesses (like 99% of my clients), then they will have no problem paying VAT since they can then deduct it from teh amoutn they themselves owe. I have never ever ever had a problem on this point. Businesses know they have to pay VAT, end of story really.

[Edited at 2010-05-07 13:51 GMT]

[Edited at 2010-05-07 13:53 GMT]


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Enrique Cavalitto  Identity Verified
Argentina
Local time: 06:31
Member (2006)
English to Spanish
It would be nice to have this information in the ProZ.com wiki May 7, 2010

It would be nice if this and other tax-related issues were poster at the wiki page on Tax issues for freelancers.

The wiki format should enable us to build together a repository of work-related information for the benefit of language professionals.

Regards,
Enrique


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Russell Jones  Identity Verified
United Kingdom
Local time: 09:31
Italian to English
Uncertainties May 7, 2010

Enrique wrote:

It would be nice if this and other tax-related issues were poster at the wiki page on Tax issues for freelancers.

The wiki format should enable us to build together a repository of work-related information for the benefit of language professionals.

Regards,
Enrique


The trouble with this Enrique is that, as yet, there are no definitive facts on this, just some conflicting interpretations of the labyrinthine new regulations and a little anecdotal evidence. I think the wiki page includes a reference to the longer discussion mentioned by Natasha above.
I suspect the crux of the issue is that, in their national regulations adopting the new EU directive, other European countries (and the all powerful "commercialisti" or business advisors in Italy in particular who keep businesses to their individual view of the straight and narrow), have no procedures to deal with unregistered UK freelancers.


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Sonia Hill
United Kingdom
Local time: 09:31
Italian to English
Not required as far as I know May 7, 2010

As you know from the other posts, a P. IVA comunitaria is basically a VAT number with your country initials in front of it.
A lot of my clients are based in Italy and I have had quite a few enquiries asking me for my VAT number recently. This is because they now all have to complete the Intrastat form.

I told my clients that I am not registered for VAT in the UK because I earn well under the threshold of £70,000. They have all confirmed that, because of this, Intrastat does not apply to their business relations with me. I don't know whether this is correct, but it's certainly what every single one of them has told me after investigating the matter further.


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Williamson  Identity Verified
United Kingdom
Local time: 09:31
Flemish to English
+ ...
Why not register... May 7, 2010

Why not register? Simple: no VAT-administration, no fines for small errors, no troubles, no extra VAT to be paid by an end-customer, who is not a company.
Unless need be, I am not willing to give up that competitive advantage.

If I need to deduce something, my aquaintance, who is VAT-registered is willing and able to buy those items which can be deduced from his taxes as business expenses on his company's name and reimburse the VAT-amount to my bank-account. But then again, he is not a lowly translator, but a well-paid IT-consultant with an annual turnover of about £110000.

To be registered for VAT is no win-win situation.
The only difficulty is how to explain to customers abroad with low tresholds and bureaucratic governments(France, Italy, Belgium, Holland, Germany) that you do not need to register for VAT if your annual turnover is below the treshold.

There are guidelines, but tax is still a matter of the Member-States. The Uk interprets those guidelines in its own way: "How to stimulate business with as little bureaucracy as possible" vs. the French, Italian, German... way.


[Edited at 2010-05-07 21:09 GMT]


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