VAT and other taxes for invoices
Thread poster: jennnifersteine
jennnifersteine
United States
French to English
+ ...
Oct 6, 2013

Hi,

I'm an American living in the US and just started freelancing translation/communications services for a French company based in France.

I registered as a sole proprietor for a business permit in my local town in California. I'm new to freelancing and when I started using a freelance template site (freshbooks) to invoice my client it asked for the VAT number.

I've done an internet search and it's all gotten rather messy and confusing. As an American, based in the US, do I need the VAT number? Do I charge sales tax (I live in California)? My understanding before is that I will just need to fill out a 1099 at the end of the tax year.

If anyone has any information on this, I would more than appreciate! Also, if there is any simple 'how-to' document for all of this tax stuff that has been helpful to anyone out there, that would be great too! Feeling a bit lost!

Thank you,
Jennifer


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JL01  Identity Verified
United States
Local time: 19:40
English to French
+ ...
NO VAT Oct 6, 2013

You are a business located outside of the EU. VAT issues do not concern you. You can't get a VAT number, anyway, precisely because you are outside of the EU.

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LEXpert  Identity Verified
United States
Local time: 18:40
Member (2008)
Croatian to English
+ ...
Some answers Oct 6, 2013

jennnifersteine wrote:

I've done an internet search and it's all gotten rather messy and confusing.


Not everything on the internet is reliable. Sole proprietorships are very really simple.


As an American, based in the US, do I need the VAT number? Do I charge sales tax (I live in California)?


In short: No and No. It should be obvious to your French client that, as a US entity, you neither have nor need a VAT number. Just explain that to them, or write n/a if it's just a line item on a form.

My understanding before is that I will just need to fill out a 1099 at the end of the tax year.


1099's are issued by PAYERS - not recipients - as evidence of non-wage income paid to subcontractors.




[Edited at 2013-10-06 14:50 GMT]


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jennnifersteine
United States
French to English
+ ...
TOPIC STARTER
No tax on invoice? Oct 6, 2013

This is all fantastic news. Thank you Rudolf and JLO1!

I have two last questions to pick your brains about:

1. On my invoice I basically list the task, rate and total.... and there is no mention of any tax... This seems a bit odd to me since I am so accustomed to seeing some kind of tax added on. Do I need to take sales tax into consideration? Is this normal that there is no tax listed? I know I am going to get asked this by my client so would like to have the facts down ahead of time!

2. Since the company is French, will they even be able to issue a 1099 for me? Does anyone have any experience going about this?

Thank you thank you thank you!!!

Jennifer


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Jenn Mercer  Identity Verified
United States
Local time: 19:40
Member (2009)
French to English
Taxes Oct 6, 2013

1. In *most* of the U.S., there is no tax on services. The sales tax you are thinking of is for sales of physical goods - sandwiches, furniture, dictionaries, etc. I have heard of a few states playing with the idea of taxes on services, but even then, this does not always include translation. It is usually a very specific set of services.

2. A French company will not issue a 1099, but you will still owe Federal income tax. Keep good records.

These are very basic questions - which is fine - but it would be a very good idea to talk to an accountant, attend some small business classes, etc. If nothing else, go to the IRS website and look over Schedule C and its instructions.


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jennnifersteine
United States
French to English
+ ...
TOPIC STARTER
Thank you - will get CPA tax help! Oct 16, 2013

Hi Jenn, Thank you for your response! I meant to reply earlier - I went ahead and found a CPA to help me with some of these basic questions - it all got too complicated and I was in need of professional help!

Thank you for your advice!

Jennifer


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