Payment to Proz.com - EU VAT number
Thread poster: Steven Segaert

Steven Segaert  Identity Verified
Estonia
Local time: 04:41
Member (2012)
English to Dutch
+ ...
Jun 14, 2012

Hi everyone,

When I paid for Proz.com membership, I received a nice invoice with an "EU" VAT number. As I am VAT registered myself, in Estonia, I didn't have to pay VAT on the invoice.

Now however comes the time to book this thing. The VIES VAT number validation tool does not recognise VAT numbers starting with "EU", and Proz.com support is not able to give me another one, pointing at the electronic services Directive.

Yet, the tax office here tells me that they need a country-specific VAT number.

If you yourself have a VAT-registered company for your freelance work and have bumped into this issue when processing the invoice from Proz.com, I would very much like to hear how you managed!

Many thanks in advance!


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Alejandro Cavalitto
Local time: 23:41
SITE STAFF
EU276000137 is correct Jun 14, 2012

Hello Steven,

Note that ProZ.com is not based on any EU country as an entity, but rather on the EU itself. This is because the company is not based in Europe, but still has to pay VAT for payments made by users in the EU. The VAT number supplied is correct.

For more information, see the EU "Directive relating to VAT on digital services entered into force on 1 July 2003" at http://europa.eu.int/comm/taxation_customs/taxation/vat/traders/e-commerce/article_1610_en.htm

The VAT number you reference, EU276000137 , is the accurate number that should be entered for those making payments to ProZ.com.

I suggest you contact your local tax office about this. They will be able to give you a better explanation than me.

Please let me know how it goes, or if you need anything else. You can re-open this support request to reply.

Best regards,
Alejandro


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Steven Segaert  Identity Verified
Estonia
Local time: 04:41
Member (2012)
English to Dutch
+ ...
TOPIC STARTER
Not the solution Jun 14, 2012

Hi Alejandro,

Thanks - that is the answer I got from support. But... everyone else (tax office, taxpayers association) says the EU VAT is registered in one specific country. Even the EU states here - http://ec.europa.eu/taxation_customs/taxation/vat/traders/e-commerce/article_1610_en.htm - that:

"The Directive however also introduces a new special simplified scheme whereby non-EU suppliers who are affected by its provisions may choose to register with a single VAT authority in a Member State of their choice.

Under this special scheme, all the procedures they need to fulfil - registration, payment and reporting - will be handled through the tax administration which they have selected, which will also give them guidance on how to meet their obligations.

The non-EU e-commerce business using this special simplified registration scheme will be offered a set of procedures which are easier to operate and more business-friendly than the existing rules for non-resident businesses generally. The single registration model provides a streamlined set of obligations that can be easily completed online without the need for a fiscal representative or for any physical presence."

(the link you sent is obsolete - this one is the new one)

As you can read, Proz.com must have a registration in a Member State, because only Member States (NOT the EU itself) can issue VAT numbers.

I suspect that Member State is Spain (as the help files state that you remit there), but as long as Proz.com doesn't want to tell me what its Spanish VAT number is, I am stuck.

In other words: I need the VAT number Proz-com received from the EU country where it registered for VAT. Unless you can get http://ec.europa.eu/taxation_customs/vies/ to verify a "EU" VAT number, in which case I will gladly admit you are right and I am wrong.

I'm sure I am not the only one, so I simply want to find out how others have resolved this issue...


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Barbara Carrara  Identity Verified
Italy
Local time: 03:41
Member (2008)
English to Italian
+ ...
Same here (Italy) Jun 15, 2012

My accountant won't consider any invoices issued from ProZ.com bearing the EU VAT number for the same reasons expressed by Steven, in that the EU code does not apply for any EU member state.

[Edited at 2012-06-15 09:37 GMT]


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Emma Goldsmith  Identity Verified
Spain
Local time: 03:41
Member (2010)
Spanish to English
In Spain the EU number is OK Jun 15, 2012

I've used the EU VAT number for ProZ for a couple of years now, and although it isn't in the VIES database, the form I complete in Spain (349) accepts this number and I haven't had any problems from the Spanish tax office.

Last year I wrote a wrong number (a typo) in the form for another company and I heard back from the tax office a couple of months later and had to enter the correct number. But the EU ProZ number wasn't questioned.

Sorry if this doesn't help your particular situation in Estonia, but I thought it might be interesting to make this contribution to the discussion.

Emma


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Steven Segaert  Identity Verified
Estonia
Local time: 04:41
Member (2012)
English to Dutch
+ ...
TOPIC STARTER
Spain is probably where the number comes from Jun 15, 2012

Emma Goldsmith wrote:

I've used the EU VAT number for ProZ for a couple of years now, and although it isn't in the VIES database, the form I complete in Spain (349) accepts this number and I haven't had any problems from the Spanish tax office.


Thanks Emma! I suspect that is because Proz.com remits to Spain and got the number from Spain, and the Spanish authorities know what to do with it.

When the Spanish government increases VAT to over 20%, I'll invite Proz.com to register in Estonia.


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Emma Goldsmith  Identity Verified
Spain
Local time: 03:41
Member (2010)
Spanish to English
Update Jul 9, 2012

Just to update my last post, because at that stage I was still completing the 349 form (VAT EU recapitulative statement) by hand.
I'm now doing it on-line, and you're quite right, there is no box for a number that starts "EU".

I've rung the Tax Office in Spain about this and they say that numbers that begin EU cannot be declared in the recapitulative statement. They suggest that I should just reflect this in my quarterly VAT payment.


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Georgios Tziakos  Identity Verified
Spain
Member (2011)
English to Greek
+ ...
Unacceptable as far as I am concerned Jul 6, 2016

I do not see how Proz.com does not have a registered branch in the EU and still has the ability to charge VAT. I believe they either need to have a registered business office in any EU state OR a MOSS (which still requires a registered business office).

https://www.taxamo.com/us-digital-companies-eu-vat/


[Edited at 2016-07-06 21:33 GMT]


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writeaway  Identity Verified
French to English
+ ...
Proz is a USA business Jul 7, 2016

Why a USA-registered business has to charge EU VAT is beyond me. And who actually receives the VAT?

[Edited at 2016-07-07 22:17 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 02:41
Member (2007)
English
+ ...
I think they are obliged to charge VAT Jul 8, 2016

writeaway wrote:
Why a USA-registered business has to charge EU VAT is beyond me. And who actually receives the VAT?

I know that many companies from around the world that have significant numbers of sales to private individuals within the EU have to register for VAT. And that will apply to all freelancers who are not themselves registered for VAT. I don't know which state collects it but I'm sure ProZ.com doesn't get to keep it.


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Katalin Horváth McClure  Identity Verified
United States
Local time: 21:41
Member (2002)
English to Hungarian
+ ...
All explained in the FAQ Jul 8, 2016

http://www.proz.com/faq/4024#4024


5 - Why does ProZ.com collect VAT? The company is not based in the EU.

Even though ProZ.com is not based in the EU, as a company selling a digital service "consumed" in the EU, ProZ.com is obligated by the EU to collect VAT at the national rate of the consumer, and to remit all VAT collected to a single EU country in a quarterly basis. ProZ.com remits to Germany.

http://ec.europa.eu/taxation_customs/common/buying_online/buying_services/electronically_en.htm

5.1 - How can I verify ProZ.com's participation in the special scheme VAT on e-Services?

Please refer to the following document to confirm ProZ.com's participation in the special scheme for the taxation of non-EU businesses which provide electronically supplied services to EU consumers:

http://cdn2.proz.com/file_resources/other/f3471571b41f7c013cd0397910941498_Bestaetigung_Registrierung_ProZcom_engl.pdf

This form may be used by EU residents for tax purposes.


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Payment to Proz.com - EU VAT number

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