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Effect on translators of upcoming changes to EU VAT laws?
Thread poster: JRM (X)
RobinB
RobinB  Identity Verified
United States
Local time: 19:48
German to English
The problem solved :-)= Sep 19, 2014

Charlie Bavington wrote: Edit again - come to think of it though, IF there was the possibility that a service provider were registered for VAT in the place of supply as well as domestically, presumably the rules and guidance for reverse charging would mention it (e.g. you'd expect to have to mention your non-domestic VAT number). So I guess that, apart from HMRC's opening remarks, the whole thing is a non-issue.


Indeed, a non-issue from start from finish. Though I can’t imagine why anybody thinks they have a right to expect clear, transparent, unambiguous, authoritative guidance from any tax authority in any country. It’s just not in their DNA

Robin
 
JRM (X)
JRM (X)  Identity Verified
Italian to English
TOPIC STARTER
Thanks for the explanation Sep 19, 2014

Robin

Thanks for taking the time to explain this. Your responses have a ring of authoritativeness that was sorely lacking from the advice I sought and received on the subject from two so-called "tax specialists".

Putting to one side the possibility that the idiosyncratic interpretations given in certain EU jurisdictions might qualify your responses, clarification on two small points in the following passage would be appreciated.

RobinB wrote:
The only exception to this rule is if the supplier can claim the small business exemption in their home country. The supplier then notes this on the invoice (including any tax authority reference number if applicable), and the client can then treat the invoice in the same way as a normal invoice.


By "small business exemption", do you essentially mean being under the VAT registration turnover threshold?

Also, what exactly do you mean by "the client can then treat the invoice in the same way as a normal invoice"? Did you mean that the client in this situation too calculates what the (output) VAT would be at their local VAT rate and adds that amount to their regular VAT return, and that the only thing that differs is what the supplier notes on his/her invoice (i.e. the fact of not being obliged - due to limited turnover - to register for VAT, as opposed to the reverse charge mechanism being applicable)?

Thanks again
 
RobinB
RobinB  Identity Verified
United States
Local time: 19:48
German to English
Clarification Sep 19, 2014

John Mifsud wrote: By "small business exemption", do you essentially mean being under the VAT registration turnover threshold?


Correct.

Also, what exactly do you mean by "the client can then treat the invoice in the same way as a normal invoice"? Did you mean that the client in this situation too calculates what the (output) VAT would be at their local VAT rate and adds that amount to their regular VAT return, and that the only thing that differs is what the supplier notes on his/her invoice (i.e. the fact of not being obliged - due to limited turnover - to register for VAT, as opposed to the reverse charge mechanism being applicable)?


Again correct, though it’s probably still worth mentioning on the invoice that reverse charge applies - which it does in such cases, even if the supplier doesn’t have a VAT ID (remember that there’s no such thing as a “VAT-free” or “VAT-exempt” transaction involving the sale of translation services within the EU. Somebody, somewhere, has to add an amount of output VAT to their VAT return).

However, some local VAT rules may differ, as I mentioned earlier. In all cases, please remember that ****it’s the (B2B) client’s responsibility to tell you what to write on your invoice****. Some countries are happy with a note in English, other countries may also require it to be disclosed in the national language. Some countries (like Germany) insist on boilerplate that makes reference to a specific section of the German VAT Act, other countries may well be more relaxed. It’s the responsibility of the translation buyer (client) to ensure that the translation supplier gets it right.

HTH,
Robin
 
JRM (X)
JRM (X)  Identity Verified
Italian to English
TOPIC STARTER
Wish there was a way to change the original title of this thread Sep 19, 2014

Thanks again Robin.

I wish there was an option to change the initial title of this thread now. Given that we're all agreed that the upcoming changes to the VAT laws are somewhat of a non-issue for us all, this thread probably now serves as a more helpful resource regarding translators and the application of EU VAT laws in general.
 
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Effect on translators of upcoming changes to EU VAT laws?







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