30% tax on jobs for Italian clients??
Thread poster: simona dachille

simona dachille  Identity Verified
United Kingdom
Local time: 22:48
Italian to English
Sep 14, 2010

A colleague of mine is being charged 30% tax when invoicing their Italian clients as my colleague is not resident in Italy so cannot provide a PIVA number. Is this right? Surely not.... Anyone else being charged this much? TIA

 

Michael Wetzel  Identity Verified
Germany
Local time: 23:48
German to English
VAT Sep 14, 2010

Hello Simona,
I don't know what the "P" in "PIVA" stands for: I can't speak Italian and could only find IVA, but I assume it is a VAT issue.

The problem is that the Italian company is having trouble getting the VAT refunded that it is paying for your colleague's translations (reverse-charge system). Your friend is presumably exempt from British VAT, but this is not relevant for business-to-business inner-EU transactions. In this case, the Italian company must pay Italian VAT (not British VAT or a lack thereof) in order to simplify the refund process. In order to do this, they need a VAT number from the supplier - unless (!) the supplier is from Great Britain (and presumably several other countries with special exemptions).

Translators from most countries need a VAT-number for inner-EU clients even if they are VAT-exempt. However, if the colleague is working out of Great Britain, this is not necessary. The Italian tax office and the client repeating its position are wrong in this case. However, that will only make your colleague's life and that of her PM easier if they can convince an Italian tax official about a British exception to a new EU-wide policy.

30% also seems ridiculously high. According to Wikipedia (EN), the highest VAT rate in Italy is 20%.

For helpful links and sources, search "VAT" in the forums: This has been a hot topic lately.
Edit: Just came up again, follow the link in this discussion: http://www.proz.com/forum/business_issues/180268-número_intracomunitario.html

Sincerely,
Michael

[Bearbeitet am 2010-09-14 13:25 GMT]


 


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