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Problems with an agency
Thread poster: Andrea Halbritter

Andrea Halbritter  Identity Verified
France
Local time: 05:32
French to German
+ ...
Feb 2, 2016

Hi!

A few weeks ago I have been contacted via Proz by a small agency in Australia as they were looking for new translators to work with.

They did then send me a first, small project to translate from French into German and proposed to pay 0,11 €/word for it. I told them per mail that I could do the job for "0,11 € HT" (the PM is French so we communicated in French, HT = before tax). She answered okay by mail and I delivered the job on time.

A few hours later she sent the translation back with about 35 comments on one page (she does speak German, but is not a native speaker and there were questions like why did you put that word on this place, why this prefix etc.) It took me 90 min to answer all these questions in the middle of the night (I was not in my office the next day) and I told her that, unless she was considerably changing her way of handling projects (or pay for my extra time passed on her comments) I would not work with her again. She replied that the German speaking customer (a translator as well it seems) was satisfied with my translation and only changed two or three words and that my translation was quite good even if she had made some comments. So far. So fine. My translation is online now.

A few days ago I did send my invoice. 0,11 € plus 20 % of tax. She told me that as she was in Australia I would not have to charge any tax as I am based in France. I told her that I do have to and she told me to check that again what I did (another 45 minutes). Of course I was right (I am in a cooperative which is a SARL - just for those based in France) and I resent an email telling her that I had to charge the VAT. Her response: No way she is paying that, no other French translator charges VAT when working for her etc. etc. I insisted and she is now considering that I should have told her before accepting the project as she had not thought that any European translator would charges taxes to a customer in Australia. (!!!) Latest mail just received by her: She proposes now to pay 50 % of the VAT as otherwise the project would not be lucrative for her. (For me as a translator it's far to be lucrative with all the hazzle, you imagine...)

What do you think about that?
Of course I am not willing to accept that. It's not a big amount but in my eyes the way this agency handles projects is not acceptable.

Thanks for your comments!

[Modifié le 2016-02-02 08:58 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 04:32
Member (2007)
English
+ ...
VAT - Scope Feb 2, 2016

I've never had to add VAT to any of my invoices as I wasn't registered for VAT in France and we're outside of its scope here in the Canary Islands (even though we're part of Spain and in the eurozone). So, I can't give an official answer.

However, it's my understanding that VAT is never added to invoices to clients who are outside of the scope of VAT. It's an EU tax, not a world-wide one. When I, as a Canaries resident, buy goods or services from EU suppliers, I ask them to remove or refund the VAT element - with certain exceptions such as hotel bills where the service is delivered locally to the supplier.


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Andrea Halbritter  Identity Verified
France
Local time: 05:32
French to German
+ ...
TOPIC STARTER
No doubt: VAT has to be charged Feb 2, 2016

Hello Sheila,

I do not know for other countries. But based in France with a SARL I definitely have to charge VAT for all customers who are neither in Switzerland nor in the European Union (for those in the EU there only is no VAT if the customer does have an EU Vat number). I did contact the French tax authorities, a lawyer specialised in taxes and a certified accountant for that so there is absolutely no doubt on that.

What I wonder is more: What do you think about the behaviour of that PM?

[Modifié le 2016-02-02 09:35 GMT]


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Lori Cirefice  Identity Verified
France
Local time: 05:32
French to English
VAT Feb 2, 2016

With all due respect, I don't think you have to charge VAT to a customer based in Australia Andrea.

Whether you are in SCOP, SARL, SA, entreprise individuelle or whatever - as far as I know there are no differences in how VAT is handled. If you're subject to VAT in France, the rules are the same for all.

I don't charge VAT to customers in non-EU countries and I know I'm doing it right because my expert-comptable and AGA have said it's all correct.

I think your customer is right.

Have a look here on page 4 especially:

http://www.grex.fr/medias/fichier/fiscalite-prestations-de-services-quelle-tva-appliquer_1425898148337-pdf

"Prestations immatérielles (publicité, conseil,
location de biens meubles corporels...) autres
que les services électroniques
(art. 59 de la directive 2006/112/CE)
Imposition à la TVA du lieu d’établissement du
prestataire.
Pas d’imposition en France si preneur établi
hors UE.
Mais, taxation en France si prestataire établi hors UE et service
utilisé en France."


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Attila Piróth  Identity Verified
France
Local time: 05:32
Member
English to Hungarian
+ ...
VAT not applicable Feb 2, 2016

Hi Andrea,

Sheila and Lori are right: VAT is not applicable according to Art. 259 B of the French tax code:

http://www.legifrance.gouv.fr/affichCodeArticle.do?cidTexte=LEGITEXT000006069577&idArticle=LEGIARTI000006309327&dateTexte=&categorieLien=cid

Read Lori's references as well.

Best,
Attila

[Edited at 2016-02-02 09:48 GMT]


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Angie Garbarino  Identity Verified
Local time: 05:32
Member (2003)
French to Italian
+ ...
No Vat for other countries Feb 2, 2016

I agree with my colleagues, you cannot charge VAT to clients based in an another country, this is a general well know rule about VAT. No matter where you are based and what kind of company you own.
You must charge VAT only to clients based in your country, France in your case.


[Edited at 2016-02-02 10:20 GMT]


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Andrea Halbritter  Identity Verified
France
Local time: 05:32
French to German
+ ...
TOPIC STARTER
I do contact my accountant again Feb 2, 2016

Thanks for your answers.

I just did send an email to my accountant (expert comptable) to check that again including your paragraphs. I hope he is answering soon.

(Got the same information about taxes from 4 different persons though since Friday, normally all experts in taxes...)

I'll put his answer here as soon as I've got it.


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Dan Lucas  Identity Verified
United Kingdom
Local time: 04:32
Member (2014)
Japanese to English
No VAT for Japan Feb 2, 2016

Andrea Halbritter wrote:
I do not know for other countries. But based in France with a SARL I definitely have to charge VAT for all customers who are neither in Switzerland nor in the European Union (for those in the EU there only is no VAT if the customer does have an EU Vat number).

Andrea, I regularly invoice clients in Japan (i.e. well outside the EU) and for translation services VAT is definitely not charged; my accountant is quite clear on that.

It is just conceivable that France and the UK take a totally different approach on this, but I doubt it. Maybe worth taking a second or third opinion?

Regards
Dan


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 04:32
Member (2014)
German to English
+ ...
not true Feb 2, 2016

Angie Garbarino wrote:

I agree with my colleagues, you cannot charge VAT to clients based in an another country, this is a general well know rule about VAT. No matter where you are based are what kind of company you own.
You must charge VAT only to clients based in your country, France in your case.


[Edited at 2016-02-02 09:51 GMT]


Well... that is not true. You do have to charge VAT to clients who do not have a VAT number, even if they are in another country but NOT if they are outside of the European VAT zone. At least that is what my accountant has said to me.

So for me, since I am based in the UK, I charge VAT to my clients based in the UK, and I charge VAT to non-VAT clients within the EU, like individuals who commission my services from Germany, but I "reverse charge" VAT for clients with VAT numbers who are NOT based in the UK (which means charging 0% VAT), and I do NOT charge any VAT to my client based in New Zealand, for example.


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Andrea Halbritter  Identity Verified
France
Local time: 05:32
French to German
+ ...
TOPIC STARTER
Answer so far Feb 2, 2016

Thank you, I did get four different opinions of French tax specialists (lawyer, accountant etc.) so far. Everyone told me for companies in France which are neither microentrepreneur nor autoentrepreneur the following rules apply:

- customer in Switzerland: no VAT (but you have to join a certain paragraph on the invoice which I regularly do)
- customer in the European Union with EU VAT number: no VAT
- customer in the European Union without EU VAT number: French VAT to charge
- customer in all other countries: French VAT to charge except if the work has been done in another country than France

And as I will have difficulties to convince the French tax authorities that I took a ride to Australia to do my translation that might be difficult.

I just recontacted one of the persons (the "expert comptable" with all your paragraphs though) and will tell you if that changes something for him...


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Angie Garbarino  Identity Verified
Local time: 05:32
Member (2003)
French to Italian
+ ...
Ok ok... I forgot non VAT clients Feb 2, 2016

Angela Rimmer wrote:

So for me, since I am based in the UK, I charge VAT to my clients based in the UK, and I charge VAT to non-VAT clients within the EU, like individuals who commission my services from Germany, but I "reverse charge" VAT for clients with VAT numbers who are NOT based in the UK (which means charging 0% VAT), and I do NOT charge any VAT to my client based in New Zealand, for example.


I forgot to specify, as I have not Non VAT clients, however no VAT to clients outside Europe... and this is true.


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Lori Cirefice  Identity Verified
France
Local time: 05:32
French to English
ARA-PL Feb 2, 2016

Andrea,

Your accountant and lawyer are wrong. Perhaps they didn't understand your business activity well? Translation services are "prestations immaterielles" and you can see it is specifically mentioned here on page 4. The ARA-PL is authoritative when it comes to questions such as these.

http://www.araplca.org/pdf/actualites/TVA_UE.pdf

Translation services are NOT "Services fournis par voie électronique" with regard to VAT.

The only exception would be if you customer in Australia is using your translations in France.


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Andrea Halbritter  Identity Verified
France
Local time: 05:32
French to German
+ ...
TOPIC STARTER
I did explain it was for translation Feb 2, 2016

Thanks, Lori, I did send him your link.

I did clearly explain to everyone though that the invoice was for a translation...


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Attila Piróth  Identity Verified
France
Local time: 05:32
Member
English to Hungarian
+ ...
Place of supply = client's country Feb 2, 2016

Lori's explanation is spot on. The place of supply is your client's country.

A couple of years ago I contacted Gary Wilkinson from the European Commission DG Taxation and Customs Union about EU customers with national VAT numbers: should VAT be charged?. His answer shows that
- customer in the European Union without EU VAT number: French VAT to charge

is wrong. It may be useful to read his detailed explanation, as it helps understand the big picture. The relevant part for the discussion at hand is this (bold mine for emphasis):

If you provide the service of translation of texts to a customer who is a taxable person established in another Member State then the place of supply is where your customer is established (Article 56 of the Directive 2006/112/EC). It is then your customer who is responsible to pay the VAT under the reverse charge procedure (Article 196 of Directive 2006/12/EC). You should mention on your invoice a reference indicting that the supply is subject to the reverse charge procedure and mention your customer's VAT number (Article 226 of Directive 2006/112/EC). In this case you should not charge VAT to your customer.


While he mentions it for a taxable person established in another Member State, it is generally true that the place of supply is where your customer is established.

Attila


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Philippe Etienne  Identity Verified
Spain
Local time: 05:32
Member
English to French
Embarrassing Feb 2, 2016

Andrea Halbritter wrote:
What do you think about that?

The people you get advice from are not competent.
The service is not consumed/used in France, there is no reason to charge any value-added tax.

You'll probably have to apologize profusely to the customer.

Philippe


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