International organizations
Thread poster: Shooting
Shooting
Mauritius
Local time: 16:28
French to English
+ ...
Aug 15, 2013

Hello,

Are services (translations) provided to international organizations exempt from tax? In other words, am I exempted from declaring the revenue I obtain from them?

I am a freelance translator whose main clients, since one year, have been international organizations to which my country is a member State. What I gather from various sources is that the services provided to any I.O are exempted from income tax. I would like confirmation on this matter please. Thank you.


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Jenn Mercer  Identity Verified
United States
Local time: 08:28
Member (2009)
French to English
Probably not Aug 15, 2013

I am not sure who your various sources are, but this is going to depend entirely on local tax law. In the United States, or rather for a U.S. citizen, regardless of where you reside[1], there is no such exemption. It looks like you're in the U.K., start here: http://www.hmrc.gov.uk/. If you don't want to read that, find an accountant.

[1]f you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.


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philgoddard
United States
Member (2009)
German to English
+ ...
No. Aug 15, 2013

It's possible they may be exempt from paying tax, but I can't imagine any European country (and you don't say where you live) exempting you as a supplier. It's still income, whatever its source.

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Nicole Coesel  Identity Verified
Netherlands
Local time: 14:28
Member (2012)
Dutch to English
+ ...
It depends Aug 15, 2013

It all depends on where you are situated (read: the country where you have established a VAT and/or COC number) and on where your clients are based/to what country they let you send your invoice.

I could help you out if you were based/registered in Europe, but my personal experience has tought me that people who work well with letters/languages do not work well with numbers. Because of that fact I have an accountant who takes care of any and all tax issues and/or questions I may have.

International VAT issues are complicated and they require a professional hand in order to make sure you are and stay out of thouble with your Tax Administration.

Hope this helps and wishing you the best of luck!

Nicole.

[Edited at 2013-08-15 18:56 GMT]


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Shooting
Mauritius
Local time: 16:28
French to English
+ ...
TOPIC STARTER
Africa Aug 15, 2013

I am based in Africa, and my country is a member State to these international organizations which are based in other African countries.

[Edited at 2013-08-15 19:37 GMT]


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Steven Segaert  Identity Verified
Estonia
Local time: 15:28
Member (2012)
English to Dutch
+ ...
Why would that be the case? Aug 15, 2013

"What I gather from various sources is that the services provided to any I.O are exempted from income tax."

As an individual, you gain income which is taxed. What is taxed and what not depends on the tax laws of the country you are a tax resident of. In some countries, some categories of income are taxed differently than others.

But for the tax office, it usually doesn't matter where these categories of income come from, even if the one who paid it to you isn't liable to pay taxes in your country. Just like you will have to pay taxes on payments made by another foreign firm that isn't paying taxes in your country.

What is true is that if these organisations don't pay taxes in the country they are based in, that usually also means they don't need to keep an administration of what is paid to whom. In other words, they don't send data to your tax office - you are yourself responsible for declaring what you did.

These organisations will of course cooperate with the authorities if information is requested, so it's not as if nobody could ever find out what you earned.

If you are contracted by these institutions directly as an individual, there probably is a clause in your contract stating that you are responsible for your own tax declaration (they won't send you any of the documents you might get from a local employer or client).

If you are contracted as a business, you simply need to follow the relevant rules for that.

When in doubt, ask the tax office. Or a bookkeeper. They tend to know what they are doing.


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Shooting
Mauritius
Local time: 16:28
French to English
+ ...
TOPIC STARTER
answer Aug 16, 2013

Thank you all for answering.
Yes I will definitely refer to my tax administration regarding this issue. But before doing that, I just want to obtain as much information as I can from people and colleagues who may know better. What I gathered from interpreter and translator colleagues who have been working with international organization is that any service provider who provides services to any international organization under contracts, is exempted from income tax, wherever the service provider is located. The theory underlying this exemption is that international organizations pay their delegates, staff, experts and contractors with quotas contributed by the Member States. Thus, a Member State that taxes the salary of a staff member or contractor of one of those organizations receives, by way of the tax, a return of some of the quota dollars it paid to the organization in the first place.

This is why I want to know more on this matter.


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Shooting
Mauritius
Local time: 16:28
French to English
+ ...
TOPIC STARTER
contracts for I.O Aug 16, 2013

Here's what I found online, and which is what my fellow colleagues seem to be telling me as well:

"Note that contracts for the international organizations are tax-exempt but national tax authorities may ask for proof of employment, which any of the organizations can supply on request."

http://interpreters.free.fr/misc/startinggeneva.htm

The thing is, everytime I perform a translation job for these organizations, I do it under an official written contract sent by them.

Your thoughts?


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Christine Schmit  Identity Verified
Luxembourg
German to French
+ ...
For in-house translators only Aug 16, 2013

S S wrote:

"Note that contracts for the international organizations are tax-exempt but national tax authorities may ask for proof of employment, which any of the organizations can supply on request."

http://interpreters.free.fr/misc/startinggeneva.htm



This applies only to in-house employment, not to freelance contracts. People who are employed (as regular, salaried employees) by the UN, the EU etc. indeed don't pay income tax (at least not the national income tax) on their salaries, but this does not apply to freelancers.


[Edited at 2013-08-16 17:26 GMT]


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Shooting
Mauritius
Local time: 16:28
French to English
+ ...
TOPIC STARTER
freelancers Aug 17, 2013

Thank you Christine,
I needed some clarification on that.


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Tatty  Identity Verified
Local time: 14:28
Spanish to English
+ ...
Are you sure? Aug 17, 2013

I did a masters in conference interpreting a couple of years ago, and we were clearly informed by head of English booth and other freelance interpreters that no tax whatsoever is paid on EU earnings and that the relevant EU office would provide us with a letter of exemption from national taxes.

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Christine Schmit  Identity Verified
Luxembourg
German to French
+ ...
VAT or income tax? Aug 17, 2013

Tatty wrote:

I did a masters in conference interpreting a couple of years ago, and we were clearly informed by head of English booth and other freelance interpreters that no tax whatsoever is paid on EU earnings and that the relevant EU office would provide us with a letter of exemption from national taxes.


I work as a freelance translator for an EU institution. The work I do for them is VAT-exempt and I do indeed receive a letter confirming the VAT-exemption that is stamped by the national VAT office for every invoice I issue to them. But this exemption applies only to VAT, not to income tax. I still have to declare what I earn from EU work on my tax return. However, this is regulated by national law and may vary from country to country, so the best solution is always to check with a local accountant.

It certainly also depends on the type of contract you have, whether you are an external contractor or staff. The link posted by S S above also states that outsourced translations for the UN are subject to income tax which is in line with what I know from the EU.


[Edited at 2013-08-17 20:34 GMT]


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