Tax issues when working for foreign clients
Thread poster: paulahedley
paulahedley
Local time: 14:06
German to English
May 18, 2006

I'm currently working for a few clients in Germany where I am living but if I apply to overseas translation agencies (USA, Switzerland, Austria, UK etc.) how does this affect my German tax? Help much appreciated!

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Mary Lalevee  Identity Verified
United Kingdom
Local time: 13:06
French to English
Tax May 19, 2006

Normally you pay tax on all your income in the country where you live. This means you have to report all your income no matter where it is from to your local tax authorities. You could give them a ring to check but this is what usually happens.

HTH


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Korina Hansel  Identity Verified
Local time: 14:06
English to German
VAT not applicable May 19, 2006

Hello Paula,

Are you referring to VAT (MwSt)? According to my accountant, VAT (MwSt.) is not applicable for foreign customers. I work with agencies in the UK, Spain and the US. When I invoice them I put my international VAT-ID on the invoice (the one starting with DE) and if I have their ID I also put it on the invoice.
As far as I know the no-VAT-rule applies to all countries within the EU (and the UK) as well as to the US. I am not sure about other countries. Also I do not know exactly about the special status of Switzerland (but I guess it would be the same as that of the EU countries). I suggest you ask an accountant to make sure.

Of course you will have to pay income tax for the money received from foreign customers.

HTH,

Korina


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Ralf Lemster  Identity Verified
Germany
Local time: 14:06
English to German
+ ...
Consult a tax advisor May 19, 2006

Paula,
On a general note, seeking the advice of a tax expert/accountant is advisable, particularly when starting a business.

There have been numerous discussions on VAT - please use the forum search: items to look for include "VAT", "Umsatzsteuer", "VAT ID" or "Kleinunternehmerregelung".

A couple of comments regarding Korina's post, if I may:

Are you referring to VAT (MwSt)? According to my accountant, VAT (MwSt.) is not applicable for foreign customers. I work with agencies in the UK, Spain and the US. When I invoice them I put my international VAT-ID on the invoice (the one starting with DE) and if I have their ID I also put it on the invoice.

Did your accountant really say that?
You don't charge VAT to businesses in other EU member states, but you do have to charge it to non-business customers.

As far as I know the no-VAT-rule applies to all countries within the EU (and the UK) as well as to the US. I am not sure about other countries.

You're mixing up two different concepts here: within the EU, you don't charge VAT to businesses (this doesn't mean that the services are VAT-exempt, but as VAT-registered businesses can deduct VAT paid on business expenses, the VAT charge is reversed for such cross-border transactions. The US and Switzerland are outside the EU.

Also I do not know exactly about the special status of Switzerland (but I guess it would be the same as that of the EU countries).

Not sure what "special status" you're referring to, but Switzerland is different as it is not part of the EU.

Best regards,
Ralf


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Korina Hansel  Identity Verified
Local time: 14:06
English to German
Clarifying May 19, 2006

Dear Ralf,

thank you clarifying my statements.

[quote]Ralf Lemster wrote:

Did your accountant really say that?
You don't charge VAT to businesses in other EU member states, but you do have to charge it to non-business customers.

Of course you are right. I was not clear in my statement in which I was indeed referring to businesses.

As far as I know the no-VAT-rule applies to all countries within the EU (and the UK) as well as to the US. I am not sure about other countries.


[quote]Ralf Lemster wrote:
You're mixing up two different concepts here: within the EU, you don't charge VAT to businesses (this doesn't mean that the services are VAT-exempt, but as VAT-registered businesses can deduct VAT paid on business expenses, the VAT charge is reversed for such cross-border transactions. The US and Switzerland are outside the EU.

Well, that's what I meant. You don't "charge" VAT (to businesses) in those countries. And since I know that the US and Switzerland are outside the EU I referred to them seperately. ("... applies to all countries within the EU ... as well as the US.") This statement should make clear that the US is set appart from the aforementioned EU countries.

Also I do not know exactly about the special status of Switzerland (but I guess it would be the same as that of the EU countries).


[quote]Ralf Lemster wrote:
Not sure what "special status" you're referring to, but Switzerland is different as it is not part of the EU.

Yes, and therefore I am mentioning Switzerland seperately because the country is not part of the EU. However, there exist "special" agreements between Sitzerland and other EU countries. Since I am not sure about the nature of these possible exceptions I adviced to consult an expert, as you did.

Korina

[Bearbeitet um 2006-05-19 07:20]

[Bearbeitet um 2006-05-19 07:21]


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Niina Lahokoski  Identity Verified
Finland
Local time: 15:06
Member (2008)
English to Finnish
+ ...
About VAT May 19, 2006

When you invoice non-EU clients (in US, Asia etc.), you don't have to worry about VAT, because it applies to EU countries only. So you only charge VAT to those EU customers that don't have a VAT ID, and to all clients in you own country.

Feel free to correct if I'm mistaken.


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xxxMarc P  Identity Verified
Local time: 14:06
German to English
+ ...
Tax issues when working for foreign clients May 19, 2006

Niina Lahokoski wrote:

So you only charge VAT to those EU customers that don't have a VAT ID, and to all clients in you own country.

Feel free to correct if I'm mistaken.


Technically, you should only charge VAT to EU customers *that are not businesses*. In other words, if a customer is a business but does not have a VAT ID, it is not correct to charge VAT.

This situation arises for instance when a translator in Germany who is registered for VAT (as most translators in Germany are) does work (e.g. checking) for a translator in the UK who is not registered for VAT (as most translators in the UK are not). In this case, the German translator should not charge his or her British colleague VAT, but - important - should first obtain some form of proof from the latter that they are a business and not a private individual.

This is the case under UK, German and Dutch tax law, and probably elsewhere in the EU as well.

Marc


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ian ward  Identity Verified
Local time: 14:06
French to English
No VAT - what to put on the (French) invoice May 23, 2006

Can I just jump in on the end of this thread as it is recent and not too far from my concern ? (I have tried to find this elsewhere with no luck)

My client, Italian, wants a mention of the French legislation making the inter-EU charging of VAT non-applicable to appear on my invoice (yes, my client is a business etc.)

This is a relatively simple case - I just need to know what that legislation is.... 'decree' 'article' etc. or where I can find it.

Thanks


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xxxsarahl
Local time: 05:06
English to French
+ ...
Try the French forum May 23, 2006

ian ward wrote:

This is a relatively simple case - I just need to know what that legislation is.... 'decree' 'article' etc. or where I can find it.

Thanks


This has been asked several times, and French colleagues have been kind enough to provide the answer.

« Exonération de TVA, art. 259 B du CGI »

http://www.proz.com/post/315748#315748

[Edited at 2006-05-23 07:53]

[Edited at 2006-05-23 07:54]


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ian ward  Identity Verified
Local time: 14:06
French to English
many thanks May 23, 2006

yes, many thanks
as I said, I did try to search the old threads but I suppose it is a question of getting the right keyword. I'm a bit new so I'll try to put some time aside to look around, when I don't need some info reasonably quickly (I did say try!)

Thanks again.

PS maybe there's even some reference stuff on this sort of thing... for newbies


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