VAT (BTW) on translation from Holland, delivered in Canada
Thread poster: Anders Larsen

Anders Larsen  Identity Verified
Local time: 09:27
Member (2009)
English to Danish
+ ...
Jan 24, 2012

Dear community,

I have been reading around, but cannot find an answer to this question. Which VAT/BTW do I add to a project delivered to a Canadian customer? I have a one-man company registered in the Netherlands.

I called the local tax-office, who said to contact Canadian tax authorities, tried emailing the Canadian tax-authorities, who do not answer.

Do I have to register in Canada too? Or just charge Dutch VAT of 19%?


Hope someone can clarify this for me!


 

Sheila Wilson  Identity Verified
Spain
Local time: 08:27
Member (2007)
English
+ ...
Neither Jan 24, 2012

Hello Anders,

I can't imagine why your tax office didn't give you a straight answer! VAT only applies to those who are in an EU member state. Therefore, you don't need to mention VAT at all.

Sheila


 

Anders Larsen  Identity Verified
Local time: 09:27
Member (2009)
English to Danish
+ ...
TOPIC STARTER
Thank you, that solves it! Jan 24, 2012

...I think Kafka might know the answer to that!

Thank you, that was a nice and clear answer.


 

Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 09:27
English to Dutch
+ ...
Need -> Allow Jan 24, 2012

Sheila Wilson wrote:

Hello Anders,

I can't imagine why your tax office didn't give you a straight answer! VAT only applies to those who are in an EU member state. Therefore, you don't need to mention VAT at all.

Sheila


In fact, AFAIK, you are not even allowed to _mention_ any VAT on the invoice. Not even 0%.


 

Samuel Murray  Identity Verified
Netherlands
Local time: 09:27
Member (2006)
English to Afrikaans
+ ...
@Anders Jan 24, 2012

Anders Larsen wrote:
Which VAT/BTW do I add to a project delivered to a Canadian customer? I have a one-man company registered in the Netherlands.


When I started out a year ago my first tax accountant could not give me a straight answer, but fortunately my business was audited in the first year (they call it a starter's visit) and the two gentlemen from the tax department confirmed the above (they even called a colleague of theirs to verify it).

If the Canadian client is a private person, charge 19% VAT. If the Canadian client is a business, charge no VAT (not even 0%), and don't mention VAT on the invoice at all (the same applies to any business client outside the EU). I initially thought that I should charge 0% VAT, but that is not correct -- one should charge no VAT. And when you submit your VAT returns, you simply don't make any mention of business clients outside the EU.

Private clients are treated as if they were present in the Netherlands when you did the translation, so the full 19% VAT applies and you have to declare it and pay it, too.


 

FreeHansje  Identity Verified
Local time: 09:27
Dutch to English
+ ...
Further question Feb 9, 2012

I am in the same situation, translated for a Canadian business. It is clear, no BTW/VAT.
I find it strange this is completely different for a private translation. Is there any link to a site where this is mentioned? After previous story I hesitate to ask the question to my regional tax-office...

Alsp, I don't charge BTW/VAT, how is this with the Canadian business? They don't have to pay anty VAT in Vanada for this invoice? My guess is NO, but I like to verify things somewhere, and sofar my Googling has not clarified this.

TIA,
Hans Brouwer

EDIT: I found a link explaining this all: http://www.schouten-accountants.nl/index.php?option=com_content&task=view&id=150&Itemid=24

However, in this link exceptions on the rules are listed, and no mention of doing a translation for a private person is mentioned...

[Edited at 2012-02-09 09:49 GMT]


 

Samuel Murray  Identity Verified
Netherlands
Local time: 09:27
Member (2006)
English to Afrikaans
+ ...
Not a comprehensive site Feb 9, 2012

FreeHansje wrote:
I found a link explaining this all: http://www.schouten-accountants.nl/index.php?option=com_content&task=view&id=150&Itemid=24

However, in this link exceptions on the rules are listed, and no mention of doing a translation for a private person is mentioned...


Yes, well, you can't expect that site to be comprehensive. For example, the site also makes no mention of what you should do if your client is an EU client but not registered for VAT (as is the case with many UK clients).


 

Alex Lago  Identity Verified
Spain
Local time: 09:27
Member (2009)
English to Spanish
+ ...
Are you sure they were right? Feb 9, 2012

Samuel Murray wrote:
When I started out a year ago my first tax accountant could not give me a straight answer, but fortunately my business was audited in the first year (they call it a starter's visit) and the two gentlemen from the tax department confirmed the above (they even called a colleague of theirs to verify it).


I don't live in Holland so I may be wrong, but as far as I know the EU directive says that exports are not subject to VAT, so surely anything you send to Canada is an export and not subject to VAT.


 

Samuel Murray  Identity Verified
Netherlands
Local time: 09:27
Member (2006)
English to Afrikaans
+ ...
Is it an export or a service? Feb 9, 2012

Alex Lago wrote:
I don't live in Holland so I may be wrong, but as far as I know the EU directive says that exports are not subject to VAT, so surely anything you send to Canada is an export and not subject to VAT.


Is translation an export or a service?

icon_smile.gif


 

Alex Lago  Identity Verified
Spain
Local time: 09:27
Member (2009)
English to Spanish
+ ...
It is an exported service Feb 9, 2012

Samuel Murray wrote:
Is translation an export or a service?


That's the wrong question, the directive covers goods or services, both of which can be exported, in our case we export services.

[Edited at 2012-02-09 15:09 GMT]


 

Samuel Murray  Identity Verified
Netherlands
Local time: 09:27
Member (2006)
English to Afrikaans
+ ...
@Alex Feb 9, 2012

Alex Lago wrote:
I don't live in Holland so I may be wrong, but as far as I know the EU directive says that exports are not subject to VAT, so surely anything you send to Canada is an export and not subject to VAT.


The Dutch tax service has this handy little flow chart:

http://www.belastingdienst.nl/rekenhulpen/diensten_in_en_uit_het_buitenland/

IF
(a) it is a service, delivered to a recipient outside the Netherlands,
(b) it is delivered to a business,
(c) it is delivered by you,
(d) it is not on the list of exceptions, and
(e) it is delivered outside the EU,
THEN
(1) it is taxed in the country of the recipient according to that country's tax laws,
(2) you add not VAT to the invoice,
(3) you do not declare it on your VAT returns, and
(4) you do not declare it on the ICP.

IF
(a) it is a service, delivered to a recipient outside the Netherlands,
(b) it is delivered to a non-business,
(c) the non-business has no VAT number in the EU,
(d) it is delivered by you,
(e) it is not on either of the two lists of exceptions,
(f) regardless of whether it is delivered inside or outside the EU,
THEN
(1) it is regarded has having been delivered in the Netherlands, and
(2) it is taxed with VAT in the Netherlands (and for commercial translation, that is 19%).

The flow chart does not say what to do with services to EU businesses with no VAT numbers, though. For that, I guess a phone call to the tax department is in order.


 

Samuel Murray  Identity Verified
Netherlands
Local time: 09:27
Member (2006)
English to Afrikaans
+ ...
Are we consultants? Feb 10, 2012

Samuel Murray wrote:
The Dutch tax service has this handy little flow chart:
http://www.belastingdienst.nl/rekenhulpen/diensten_in_en_uit_het_buitenland/

IF
(a) it is a service, delivered to a recipient outside the Netherlands,
(b) it is delivered to a non-business,
(c) the non-business has no VAT number in the EU,
(d) it is delivered by you,
(e) it is not on either of the two lists of exceptions,
(f) regardless of whether it is delivered inside or outside the EU,
THEN
(1) it is regarded has having been delivered in the Netherlands, and
(2) it is taxed with VAT in the Netherlands (and for commercial translation, that is 19%).


I had a mail exchange off-list about this, and it seems that both the UK and Germany tax departments regard remote translation services as "consulting services", which is one of the professions on the list of exceptions at point #f above. The Dutch site is less clear on this, and I find it odd to call myself a consultant, since I don't give advice on how to do something, but instead do it myself.

What say you? Are we consultants?


 

Alex Lago  Identity Verified
Spain
Local time: 09:27
Member (2009)
English to Spanish
+ ...
In Spain the case is similar Feb 10, 2012

That's why I thought it was strange that you had to add VAT, in Spain our operations are considered to be related to "text and information" as opposed to consultants as is the case in the UK and Germany, but basically what both these things mean is that the service we provide is considered to have been supplied in the recipient's country, as the recipient in this case is in Canada the invoice carries no VAT.

 


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VAT (BTW) on translation from Holland, delivered in Canada

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