Charge VAT to UK agency with German office?
Thread poster: Djamila_Vilcsko

Djamila_Vilcsko  Identity Verified
Local time: 04:28
English to German
Apr 15, 2011

Hi all,

I have just recently started to work with a big UK agency and have just found out that they also have an office in Germany because I got a job offer from their German office. As far as I know this changes the whole part of charging them VAT or not. When I started out as a translator a tax consultant told me that VAT needs to be charged to foreign companies as soon as they have a branch in Germany.
I have accepted two jobs from that agency so far (both came from their UK office) and they have a funky online system where everything is processed in there, even the invoices and I don't even have chance to add VAT there.icon_frown.gif
I asked the PM in the German office about this and she said they only do the organizational work and don't handle the money matter so the invoice needs to be sent to the UK. This sounds fishy to me - I have some other international agencies I work for and I always send the bill to their German office.

My question is: Can anyone confirm what I remember from the lessons the tax consultant gave me? I.e. am I right that I automatically need to invoice the German branch (with VAT) for whatever job the agency assigned to me (no matter whether the request came from the German or the UK branch)?

I will try to clear this up with that agency although I doubt that I'll have any success. In the meantime I would be grateful for any feedback on this.

Thanks a lot!



Sarah Swift  Identity Verified
Local time: 04:28
German to English
There *might* be something fishy here - but is the onus on you to sort it out? Apr 15, 2011

If you follow the instructions you have been given and invoice the UK address (from your German base), you will then put that transaction down in your next "Zusammenfassende Meldung" or recapitulative statement, together with the company's VAT ID. You will then have supplied the tax authorities with an accurate record for the transaction and done what you can to help them determine whether your customer is on the right side of the law. Whether he is or he isn't, you will legitimately be able to maintain that you followed the instructions you were given, acted in good faith, and filed correct records. So I don't see where the problem is.

I don't know much about tax though, so I may be missing something important here. If I am, I hope colleagues will post whatever cautionary tales they may have.


RobinB  Identity Verified
United States
Local time: 21:28
German to English
Doesn't sound right to me Apr 15, 2011

Hi Djamila

I'm not aware of any rule that corresponds to what your StB is claiming. Companies can have operations in all EU countries, each with its own local VAT number, and each operating independently of the others for VAT purposes. I suggest you ask your StB to quote the precise rule. At the very least, you need a written statement from your StB giving his or her binding opinion on the matter because if (as I suspect) that opinion is incorrect, at least you have recourse to the StB if you get into trouble with the tax authorities.

If you receive your orders from this company's UK office, then the usual cross-border VAT rules apply. It's also perfectly possible for the order to come from the German office, but the invoice recipient to be the UK office, in which case you don't charge German VAT either (though of course you add the 19% VAT as usual to the output VAT line in your German VAT return). Lots of international businesses such as banks and law firms do this, so it's clearly very established practice. It doesn't actually change VAT collection in principle, just the location where it's collected.

One thing, though: no matter how "funky" this agency's online system may be, you still need to prepare and file away your own paper invoices for each transaction. German tax law requires this. These invoices must comply with all the standard German invoicing rules, e.g. including your own VAT ID No. and the VAT ID No. of the client, the sequential invoice number, the period in - or date on - which the service was provided, any client reference number, etc., etc.


Djamila_Vilcsko  Identity Verified
Local time: 04:28
English to German
Thanks! Apr 18, 2011

Sarah and Robin, thanks for your replies. You made some very good points.
I totally forget about the "zusammenfassende Meldung" and that this is a good way how tax authorities can spot discrepancies - if there's really something wrong. I agree with Sarah, that it really shouldn't be my responsibility to uncover anything that is possibly not handled right by the agency. I cannot check for every single client of mine whether they have a German office or not (just because it is not mentioned on their website it doesn't mean they don't have one).
Robin, I heard this rule form my tax consultant years ago and stopped working with him when my accounting costs became too high. So I don't actually have an tax consultant any more and I am not extremely motivated to pay 50-100 Euros to a tax consultant just to find out about this matter, particularly when the tax consultant's opinion could still be wrong and won't really be a guarantee against any possible claims from the tax office. Actually, the tax office should be able to answer my question but often, even they don't really know what's going on. I tried to ask them about the "zusammenfassende Meldung" a few weeks ago and they did not even know what it is...
I really helped me to get your opinions on the matter. I guess I totally panicked when I found out on Friday but what you're saying makes sense and I'll just write my usual invoice and that's it.

Thanks again.



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Charge VAT to UK agency with German office?

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