| Pages in topic: < [1 2 3 4] > | Problems with an agency Thread poster: Andrea Halbritter
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| more clarification | Feb 2, 2016 |
Andrea Halbritter wrote:
- customer in all other countries: French VAT to charge except if the work has been done in another country than France
This part is definitely wrong - as you can see in the links I provided, the answer depends on the type of service being invoiced.
| | | | | translators may be an exceptional case | Feb 2, 2016 |
At least in Germany, translators do not charge German VAT to clients from outside the EC because of a special exception for "Freiberufler" (the liberal professions). The relevant French exception sounds like it may have a slightly different basis, but a parallel exception clearly seems to exist.
My point is only that what all of these experts are telling you is not moronic or absurdly misinformed, they are just unaware of the special regulation in question or unaware that it applie... See more At least in Germany, translators do not charge German VAT to clients from outside the EC because of a special exception for "Freiberufler" (the liberal professions). The relevant French exception sounds like it may have a slightly different basis, but a parallel exception clearly seems to exist.
My point is only that what all of these experts are telling you is not moronic or absurdly misinformed, they are just unaware of the special regulation in question or unaware that it applies to the work of translators. The situation that they are describing applies to 95%+ of similar cases, just not to you. That is to say, they may be perfectly intelligent and generally competent people who have made a more or less understandable mistake.
@ Attila: Could the passage you cited be taken out of context? (That is, do the sentences preceding your quote drastically change its meaning?) I've never heard anyone argue that if I provide a service to a private client (a client without a VAT number) outside of Germany but within the EC that I should not charge them German VAT. After all, that is the whole logic of the reverse-charge system: (1) Place the responsibility for collecting and turning over VAT on businesses instead of private consumers so that tax offices can efficiently and effectively uncover fraud, (2) Permit businesses to report VAT in their own country so that they do not have to run around the whole of Europe chasing down their refunds. ▲ Collapse
| | | | Attila Piróth 
France
Local time: 06:44
Member
English to Hungarian
+ ...
| @ Michael: taxable person or not? | Feb 2, 2016 |
Michael Wetzel wrote:
@ Attila: Could the passage you cited be taken out of context? (That is, do the sentences preceding your quote drastically change its meaning?) I've never heard anyone argue that if I provide a service to a private client (a client without a VAT number) outside of Germany but within the EC that I should not charge them German VAT.
Hi Michael,
It makes a crucial difference whether the client has a VAT number in a member state ("taxable person") or not ("private individual"). See another excerpt from the same thread (with bold added):
Article 56 of the Directive 2006/112/EC applies to taxable persons established in the EU and any customer established outside the EU. So if you customer is a private individual outside the EU the rule would still apply. For a supply of translation services to a private individual in the EU who is not a taxable person the place of supply would be where you the supplier is established and the rules of this Member State will apply.
Attila
| | | | | No VAT outside the EU VAT area | Feb 2, 2016 |
All your so-called experts are getting this wrong, and you really should sack them.
Translation is an 'intellectual' service, and according to the EU's VAT Directive, the place of supply is thus at the client's premises.
When the service is supplied to a client domiciled outside the EU's VAT area (not the same as the EU), there is no VAT, regardless if the client is an individual or a business. Never ever.
Your company form has nothing to do with this. It... See more All your so-called experts are getting this wrong, and you really should sack them.
Translation is an 'intellectual' service, and according to the EU's VAT Directive, the place of supply is thus at the client's premises.
When the service is supplied to a client domiciled outside the EU's VAT area (not the same as the EU), there is no VAT, regardless if the client is an individual or a business. Never ever.
Your company form has nothing to do with this. It's about the EU's VAT Directive and its national transpositions, not French company forms.
You charge VAT only to clients domiciled in France and non-VAT registered clients (businesses and individuals) in the EU's VAT area outside France.
VAT is a tax on consumption taking place in the EU.
For non-French VAT-registered businesses domiciled in the EU's VAT area, you apply the reverse charge procedure on condition they can supply a VAT number you can verify in VIES (keep proof of verification). You must mention their VAT number on the invoice and that VAT is the client's responsibility.
You need to apologise to your client whom you have treated badly because of your incompetent advisors.
Although so-called experts are there to help you getting things right, don't forget you're the boss, and you're taking the whack if you apply incorrect advice and cause trouble with your clients. Some critical sense does no harm.
You could have searched these forums and found it had already been discussed. Then you would have known there was a conflict between what your bad advisors claim and what your colleagues do. You could have searched the EU's website and found information about it. ▲ Collapse
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| 4 people = no critical sense? | Feb 2, 2016 |
Well, I think asking 4 different people working in the field of taxes (and not only one) and writing an email to the French tax authorities should have been enough critical sense...
| | | | | taxable person | Feb 2, 2016 |
Hi Attila,
Sorry, I misunderstood what you were saying (I interpreted the quotation out of context, so to speak). I interpreted "taxable person" to mean something like "any person or entity subject to taxation", but I now see that this interpretation is clearly wrong in the context of European VAT regulations.
But then I don't understand why you've written that Andrea's statement "customer in the European Union without EU VAT number: French VAT to charge" is incorrect.<... See more Hi Attila,
Sorry, I misunderstood what you were saying (I interpreted the quotation out of context, so to speak). I interpreted "taxable person" to mean something like "any person or entity subject to taxation", but I now see that this interpretation is clearly wrong in the context of European VAT regulations.
But then I don't understand why you've written that Andrea's statement "customer in the European Union without EU VAT number: French VAT to charge" is incorrect.
Is the distinction that you are making related to the special cases involving bona fide taxable persons without a VAT number or am I still missing something? ▲ Collapse
| | | | | Critical sense | Feb 2, 2016 |
With "critical sense", I mean trying to understand the rules yourself instead of just taking the word of other people who may be more or less competent, and I added that you could simply have searched the forums here to find out what others are doing. Or looked it up on the EU's informational site, where the rules are explained in comprehensible language.
How to tax your work is, after all, a fundamental part of your business, so it needs to be in order from day one.
Yo... See more With "critical sense", I mean trying to understand the rules yourself instead of just taking the word of other people who may be more or less competent, and I added that you could simply have searched the forums here to find out what others are doing. Or looked it up on the EU's informational site, where the rules are explained in comprehensible language.
How to tax your work is, after all, a fundamental part of your business, so it needs to be in order from day one.
You cannot be unaware that many people are incompetent whether or not they have diplomas. I have certainly come across many of them, not least during 15 years in France, but they are not only in France. It's just the country where I have spent the most time as a freelancer.
The damage caused affects you, so it's in your own interest to be vigilant before you cause problems with your clients and harass them with your bad advisors' mistakes. It gives you a bad reputation among your clients and makes you appear incompetent to them. It's much easier to destroy one's reputation than to acquire it.
I don't mean to berate you but simply to tell you how I've kept myself out of such trouble, and that is by not simply uncritically believing what people tell me, diploma or not.
So, advisors or not, what your client is concerned, it is you who have goofed, and the only way to hope to fix the damage is to admit you've goofed and apologise. You can still mention your endless row of incompetent advisors, but in the end, the responsibility is yours. The buck stops with the boss, and that’s you. ▲ Collapse
| | | | Attila Piróth
France
Local time: 06:44
Member
English to Hungarian
+ ...
| National VAT number | Feb 2, 2016 |
Michael Wetzel wrote:
Hi Attila,
Sorry, I misunderstood what you were saying (I interpreted the quotation out of context, so to speak). I interpreted "taxable person" to mean something like "any person or entity subject to taxation", but I now see that this interpretation is clearly wrong in the context of European VAT regulations.
But then I don't understand why you've written that Andrea's statement "customer in the European Union without EU VAT number: French VAT to charge" is incorrect.
Is the distinction that you are making related to the special cases involving bona fide taxable persons without a VAT number or am I still missing something?
Back in 2009, I contacted Mr. Wilkinson because I had a client who had a national (Spanish) VAT number that was not an EU VAT number. This is admittedly rather rare these days.
Best,
Attila
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| Agree on that one | Feb 2, 2016 |
I absolutely agree with you, Thomas but I did not think that so many "experts" could be wrong and as you can may see on my profile I am so overbooked since december that I would not have had the time to look that up (I tried though on websites of the French tax authorities but only found informations about other EU countries). That's just why I do work with an accountant. (I'll have to choose another one I guess...)
| | | | | 'Experts' wrong | Feb 2, 2016 |
It's quite incredible that so many 'experts' are wrong, but I'm not surprised in the case of France. Let me elaborate below.
I just googled
"site:europa.eu tva services"
That led me to
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/vat_on_services/index_fr.htm
whe... See more It's quite incredible that so many 'experts' are wrong, but I'm not surprised in the case of France. Let me elaborate below.
I just googled
"site:europa.eu tva services"
That led me to
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/vat_on_services/index_fr.htm
where the rules explained are admittedly complicated, but there is a link to the VAT Directive, where one can find this in Article 56:
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32006L0112&from=FR
"1. The place of supply of the following services to customers established outside the Community, or to taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment for which the service is supplied, or, in the absence of such a place, the place where he has his permanent address or usually resides:
...
(c)
the services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, as well as data processing and the provision of information;"
About France, it was my unfortunate experience that there are two profiles of 'experts': 1. those who take their occupation and profession seriously and provide a genuine and competent service, 2. those who think that having a diploma means they enter into a semi-divine sphere where they are above the law and petty questioning by ordinary mortals and therefore can do whatever they please, no longer need to make a professional effort, and can legitimately show disdain to anyone of lower status than themselves.
I ran into several 'class 2' 'experts' in France, and it would seem you did too. I shall make no attempt to quantify the sizes of the two groups, and as I said, there are incompetent people everywhere. But I walked away with the unfortunate conclusion that I couldn't trust anyone in France until that person had showed themselves worthy of trust. But I pretty much apply that principle to everybody now. I haven't been in Germany long enough to conclude anything about competence or not yet. Being sceptical requires a bit more time, but it helps keeping you out of trouble. ▲ Collapse
| | | | | Same experience | Feb 2, 2016 |
Sad to say so, Thomas, but my experience here in France is pretty much the same (in nearly any field), that's why I did go for 4 differents persons to begin with...
My next account will be the one who gives me a correct answer to that tax question...
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Andrea, you don't need to wait on the reply from your accountant to apologize to your customer and issue a revised invoice!
Translators are a special group - I think most of us have above average search skills and are able to find and understand information on many subjects including taxes... when we have enough time to do it!
Did your SIE (tax authorities) actually answer you in writing? You should complain about their mistaken information.
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I can not issue an invoice myself. It's the accountant of my cooperative who does the invoices for all of us. (See the problem?)
Guess he is rereading all the paragraphs now...
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Andrea Halbritter wrote:
I can not issue an invoice myself. It's the accountant of my cooperative who does the invoices for all of us. (See the problem?)
Guess he is rereading all the paragraphs now...
Ah, right... well maybe you can send some kind of email to your client just to let them know that you checked again and you're sorting it out... in case the accountant doesn't answer today, at least they'll have something when they wake up in Australia that will hopefully contribute to smoothing things out while your accountant gets his/her act together!
| | | | | Answer of my accountant | Feb 2, 2016 |
Here is the answer of my accountant (accountant number 1...)
"la traduction ne rentre pas dans les activités réputées avoir été exécutées hors du territoire.
En conséquence, la TVA est applicable"
(to whom I did send all your paragraphs...)
Maybe an English native can translate that for those who do not understand English?
  ... See more
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