Pages in topic:   [1 2] >
Should I be charged VAT on an invoice from a company in Spain?
Thread poster: Wendy Cummings

Wendy Cummings  Identity Verified
United Kingdom
Local time: 22:33
Member (2006)
Spanish to English
+ ...
Feb 4, 2015

I am a sole trader based in England. I am not VAT registered and, as I understand it, “I do not have a VAT number pursuant to Article 272.1(d) of Directive 2006/112/EC and to HMRC Notice 700/1 (Apr 2010) Section 2 - VAT exempt invoice pursuant to Article 196 of Directive 2006/112/EC - This service is subject to the VAT reverse charge”. This is what I write when I send invoices to Spain.

Recently I outsourced a piece of work to a Spanish agency. They asked for my NIF and I told them I didn't have one, and quoted the above. However, they have just sent me an invoice including VAT at the Spanish rate of 21%.

Is this correct? And, if not, how do I explain it to them?


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:33
Member (2007)
English
+ ...
But your supplier IS registered for VAT Feb 4, 2015

No such thing as a translator in Spain who isn't registered for VAT (if they're trading legally), except for us way down here in the Canaries, where we aren't within the scope of VAT at all. So this person has to charge VAT on all invoices. If you can't claim it back (which you can't), then you have to pay it. That's my understanding, at any rate. They will be saying that they worked for a private individual, who paid the VAT.

 

Andrea Halbritter  Identity Verified
France
Local time: 23:34
Member (2014)
French to German
+ ...
It's correct Feb 4, 2015

Your supplier has to charge VAT if you do not have a VAT number. So yes, it's correct!

 

Mark Hamlen  Identity Verified
France
Local time: 23:34
Member (2010)
French to English
+ ...
They have to charge it Feb 4, 2015

If you don't have an EU VAT number, all companies in the EU have to charge you VAT.

If you do have a VAT number, then the invoice is made without VAT and the payment you subsequently make is declared to their national customs agency, who then report it to your VAT people, who will then collect VAT from you. (Complicated, isn't it?)


Karel van den Oever
 

Catarina Lopes  Identity Verified
Portugal
Local time: 22:34
Member (2013)
English to Portuguese
+ ...
VIES Feb 4, 2015

Hi Wendy,

Is your business activity registered in VIES?

http://ec.europa.eu/taxation_customs/vies/
http://ec.europa.eu/taxation_customs/vies/faq.html#item_1

If it is not, then I think the agency has to charge VAT. At least that's what I've been told to do when I issue an invoice to a client/agency based in EU that is not registered in VIES.

I find VAT laws really complicated, but I hope this helps.

Catarina Lopes



[Edited at 2015-02-04 15:15 GMT]


 

Wendy Cummings  Identity Verified
United Kingdom
Local time: 22:34
Member (2006)
Spanish to English
+ ...
TOPIC STARTER
Grrr so be it! Feb 4, 2015

It seems it is correct then. But it is very frustrating as I was acting as middleman in this particular case, and quoted my own client on the basis of the non-VAT figure originally quoted to me (they must have just assumed I was VAT registered), so now I am going to be out of pocket.

Grrr!


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
VAT Feb 4, 2015

Wendy Leech wrote:

It seems it is correct then. But it is very frustrating as I was acting as middleman in this particular case, and quoted my own client on the basis of the non-VAT figure originally quoted to me (they must have just assumed I was VAT registered), so now I am going to be out of pocket.

Grrr!


If you don't give them a VAT number, they can't apply the reverse charging procedure, as others have said, as they have to document that VAT is being accounted for in another EU Member State.

I seem to have understood that even if you are exonerated from VAT, you can ask the tax authorities for a VAT number for such purposes, while remaining exonerated, but it is very difficult to find any clear information about this.

In any case, when someone takes the decision whether to be exonerated from VAT or not, it would be a mistake to presume that being exonerated from VAT simply saves you the 20% UK VAT. Being exonerated means that you have to pay VAT on all supplies and services. If your clients are mainly VAT-registered, then whether or not you charge them VAT is irrelevant for them, as they get the VAT paid to you back. In such a scenario, being exonerated is a losing business for you.


 

Catarina Lopes  Identity Verified
Portugal
Local time: 22:34
Member (2013)
English to Portuguese
+ ...
Yes. Feb 4, 2015

Thomas Frost wrote:

I seem to have understood that even if you are exonerated from VAT, you can ask the tax authorities for a VAT number for such purposes, while remaining exonerated, but it is very difficult to find any clear information about this.



That's what I did.


 

2G Trad  Identity Verified
Italy
Local time: 23:34
Member (2000)
English to Italian
+ ...
Better safe Feb 4, 2015

Wendy Leech:
It seems it is correct then. But it is very frustrating as I was acting as middleman in this particular case, and quoted my own client on the basis of the non-VAT figure originally quoted to me (they must have just assumed I was VAT registered), so now I am going to be out of pocket.


To avoid these unpleasant feelings from EU clients, I always quote, from the beginning, that invoices will be added VAT (22% in my case) wherever the client is not EU VAT registered.

Cheers!
Gianni


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
That's what you did Feb 4, 2015

Catarina Lopes wrote:

Thomas Frost wrote:

I seem to have understood that even if you are exonerated from VAT, you can ask the tax authorities for a VAT number for such purposes, while remaining exonerated, but it is very difficult to find any clear information about this.



That's what I did.


You asked for a VAT number? Did you get one? While remaining exonerated?


 

Tom in London
United Kingdom
Local time: 22:34
Member (2008)
Italian to English
You have to pay Feb 4, 2015

Although you may not be registered for VAT in the UK, if you buy something, in the UK or anywhere else, you still have to pay the VAT on it.

If you were VAT registered, you could then claim it back, but since you're not, you've lost it.

End of story!


 

Catarina Lopes  Identity Verified
Portugal
Local time: 22:34
Member (2013)
English to Portuguese
+ ...
Thomas, Feb 4, 2015

Thomas Frost wrote:

Catarina Lopes wrote:

Thomas Frost wrote:

I seem to have understood that even if you are exonerated from VAT, you can ask the tax authorities for a VAT number for such purposes, while remaining exonerated, but it is very difficult to find any clear information about this.



That's what I did.


You asked for a VAT number? Did you get one? While remaining exonerated?


I'm registered in VIES while remaining exonerated from VAT, but only when invoicing clients in my own country, whether they are companies or private individuals. When it comes to other countries, I only charge VAT if the client is not EU VAT registered. I did not get a VAT-specific number; I use the same tax number I had before.

This is all new to me as well.

[Edited at 2015-02-04 18:47 GMT]

[Edited at 2015-02-04 19:32 GMT]


 

Kirsten Bodart  Identity Verified
United Kingdom
Local time: 23:34
Dutch to English
+ ...
Reverse charge has been abolished Feb 5, 2015

But VAT has to be charged somewhere, so if you don't have a VAT number like in the UK where the threshold is quite high (which would cancel out the VAT you would pay as you would deduct it from your VAT bill), the company has to charge you VAT like it does to private clients (who don't have VAT numbers by default).

It's pretty simple really: two VAT numbers in different EEC countries = no VAT charged, 1 company with VAT number + 1 private person/company without VAT number = VAT charged by default by seller on services that are normally subject to VAT (obviously not on services that are exempted from that).

You can get a VAT number if it's worth your while to deduct the VAT you pay, but then I think you need to charge it as well.


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
Reverse VAT not abolished Feb 5, 2015

Kirsten Bodart wrote:
Reverse charge has been abolished


No, it hasn't. What makes you think that?

Kirsten Bodart wrote:
It's pretty simple really: two VAT numbers in different EEC countries = no VAT charged,


That seems to contradict your own title, and it is not strictly correct. The seller doesn't charge VAT but the buyer has to account for input VAT (and then deduct the VAT again).


 

Lori Cirefice  Identity Verified
France
Local time: 23:34
French to English
In France yes Feb 5, 2015

Catarina Lopes wrote:

Thomas Frost wrote:

I seem to have understood that even if you are exonerated from VAT, you can ask the tax authorities for a VAT number for such purposes, while remaining exonerated, but it is very difficult to find any clear information about this.



That's what I did.


In France, this is possible. You can request to have a VAT number to be used ONLY on invoices to/from companies in other EU countries, which makes it possible to avoid the situation described the OP.

In this way, both parties can satisfy the VIES requirement by verifying each other's VAT numbers, but the company in France retains their status as "not subject to VAT" because they are under the threshold. The French company does not invoice VAT, and does not claim back VAT. The French company may NOT use this VAT number for invoices to/from France.

I have been following posts on this very issue for a couple years on ProZ, and I believe that a similar provision is available in some other EU countries.... with the notable exception of the UK!


 
Pages in topic:   [1 2] >


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

Should I be charged VAT on an invoice from a company in Spain?

Advanced search







memoQ translator pro
Kilgray's memoQ is the world's fastest developing integrated localization & translation environment rendering you more productive and efficient.

With our advanced file filters, unlimited language and advanced file support, memoQ translator pro has been designed for translators and reviewers who work on their own, with other translators or in team-based translation projects.

More info »
CafeTran Espresso
You've never met a CAT tool this clever!

Translate faster & easier, using a sophisticated CAT tool built by a translator / developer. Accept jobs from clients who use SDL Trados, MemoQ, Wordfast & major CAT tools. Download and start using CafeTran Espresso -- for free

More info »



Forums
  • All of ProZ.com
  • Term search
  • Jobs
  • Forums
  • Multiple search