Ireland/VAT: do I need to charge VAT with European customers?
Thread poster: Jérôme Leroux

Jérôme Leroux  Identity Verified
Ireland
Local time: 10:28
English to French
+ ...
Mar 13, 2011

Hello all,

This is my first post ever on the Proz forum. For me this is quite an exciting period since I am in the process of setting up my business in translation in Ireland where I have been living for 2 and a half year now. As you all know very well, the beginning is always very exciting but each step brings its lot of new questions. It is not always that easy to know where to start from but I have to say that Proz is a very precious mine of information.

My first question is about VAT: quite a subject! Of course since I am based in Ireland and that the rules are different from one country to the other, I would like to have the opinion and share the experience of other fellow translators based in Ireland too.

From my research, I know now that in Ireland there is no need to be registered for VAT if your annual turnover does not reach beyond the threshold of € 37,500: as a beginner I am in that category. But what about work with agencies or direct customers outside Ireland? In Europe? Or outside Europe? I found it very difficult to find this information anywhere.

I am hoping to find customers in Italy or in France in particular that is why I would like to know if I must charge them VAT since I do not have to in Ireland? And if I have to, do we charge the VAT applicable in Ireland or in the customer’s country? What is the rule of thumb?

I also heard about the EU VAT number? What is it?

I hope it makes sense; it is a lot of questions so I thank you in advance for your help.

Jérôme


 

Tom in London
United Kingdom
Local time: 10:28
Member (2008)
Italian to English
Ireland Mar 15, 2011

Jérôme Leroux wrote:

Hello all,

This is my first post ever on the Proz forum. For me this is quite an exciting period since I am in the process of setting up my business in translation in Ireland where I have been living for 2 and a half year now. As you all know very well, the beginning is always very exciting but each step brings its lot of new questions. It is not always that easy to know where to start from but I have to say that Proz is a very precious mine of information.

My first question is about VAT: quite a subject! Of course since I am based in Ireland and that the rules are different from one country to the other, I would like to have the opinion and share the experience of other fellow translators based in Ireland too.

From my research, I know now that in Ireland there is no need to be registered for VAT if your annual turnover does not reach beyond the threshold of € 37,500: as a beginner I am in that category. But what about work with agencies or direct customers outside Ireland? In Europe? Or outside Europe? I found it very difficult to find this information anywhere.

I am hoping to find customers in Italy or in France in particular that is why I would like to know if I must charge them VAT since I do not have to in Ireland? And if I have to, do we charge the VAT applicable in Ireland or in the customer’s country? What is the rule of thumb?

I also heard about the EU VAT number? What is it?

I hope it makes sense; it is a lot of questions so I thank you in advance for your help.

Jérôme


Jerome

Assuming you are **wholly resident in Ireland for tax purposes** then you are subject to Irish tax law and no other.

Since you are providing a service from within Ireland, and you are not liable for VAT under Irish law, you should not apply VAT to any of your invoices to anyone, regardless of where they are. To do so would be illegal.

That much is perfectly clear; however since you are just starting out, and you seem a little unsure as to what is required in terms of your accounting, I suggest you consult an Irish accountant who understands your particular circumstances. The accountant will help you to get set up correctly. It is important to get these things right, at the beginning.

After one or two tax years, when you've got the hang of doing your bookkeeping, invoicing etc. you could reduce your reliance on the accountant and only consult him/her when you need to.

[Edited at 2011-03-15 18:32 GMT]


 

Daniela Ciafardoni  Identity Verified
United Kingdom
Local time: 10:28
Italian to English
+ ...
I am pretty sure you don't need to Mar 15, 2011

Hi Jerome,
I am pretty sure you do not need to charge European customers VAT.
I was asked to provide a VAT number by some European agencies last year. I ended up registering for VAT voluntarily, even though I am below the VAT threshold.
I was told that I would only need to charge VAT if my client is based in the UK, otherwise it would have not been convenient for me since most of the agencies I work for are based abroad.
I hope this helps.
Daniela


 

Jérôme Leroux  Identity Verified
Ireland
Local time: 10:28
English to French
+ ...
TOPIC STARTER
Thank you Tom! Mar 16, 2011

I am a wholly resident in Ireland indeed. I think that consulting an accountant is a very good idea, I was already thinking about this option.
Anyway your comment confirms other information that I have found. I am pretty sure now that I don't need to apply VAT since I am not liable for it in Ireland. Thanks very much for sharingicon_smile.gif

Jerome

Tom in London wrote:

Jerome

Assuming you are **wholly resident in Ireland for tax purposes** then you are subject to Irish tax law and no other.

Since you are providing a service from within Ireland, and you are not liable for VAT under Irish law, you should not apply VAT to any of your invoices to anyone, regardless of where they are. To do so would be illegal.

That much is perfectly clear; however since you are just starting out, and you seem a little unsure as to what is required in terms of your accounting, I suggest you consult an Irish accountant who understands your particular circumstances. The accountant will help you to get set up correctly. It is important to get these things right, at the beginning.

After one or two tax years, when you've got the hang of doing your bookkeeping, invoicing etc. you could reduce your reliance on the accountant and only consult him/her when you need to.

[Edited at 2011-03-15 18:32 GMT]


 

Jérôme Leroux  Identity Verified
Ireland
Local time: 10:28
English to French
+ ...
TOPIC STARTER
Grazie Daniela ! Mar 16, 2011

Apparently the law in the UK is very similar to the Irish one, it's good to know. I think indeed that I am in the same situation than you at the moment. So no VAT to be charged: at least it seems more easy this way at the start! Thanks very much for your help.

Daniela Ciafardoni wrote:

Hi Jerome,
I am pretty sure you do not need to charge European customers VAT.
I was asked to provide a VAT number by some European agencies last year. I ended up registering for VAT voluntarily, even though I am below the VAT threshold.
I was told that I would only need to charge VAT if my client is based in the UK, otherwise it would have not been convenient for me since most of the agencies I work for are based abroad.
I hope this helps.
Daniela


 


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