Invoices to the UK after Brexit
投稿者: Teresa Zuhl

Teresa Zuhl
ドイツ
英語 から ドイツ語
Apr 8

Dear colleagues,

Apologies if this topic has been discussed already elsewhere.
I have to write my first invoice for a UK client (agency) after Brexit and was wondering how VAT works now that the UK has left the EU and reverse charge doesn't apply anymore. I am in Germany and searching online, I found a lot of confusing information but nothing very precise. Does anyone have any experience with this? Any advice would be very much appreciated. Many thanks for your time.
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Dear colleagues,

Apologies if this topic has been discussed already elsewhere.
I have to write my first invoice for a UK client (agency) after Brexit and was wondering how VAT works now that the UK has left the EU and reverse charge doesn't apply anymore. I am in Germany and searching online, I found a lot of confusing information but nothing very precise. Does anyone have any experience with this? Any advice would be very much appreciated. Many thanks for your time.

Hope you're all having a lovely day,

Teresa
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Thomas T. Frost  Identity Verified
2014に入会
デンマーク語 から 英語
+ ...
No VAT Apr 8

As a third country, the UK should be treated like any other county outside the EU's VAT area, i.e. no VAT applied. The reverse procedure and the client's VAT number should also not be mentioned.

Chris S
Teresa Borges
P.L.F.Persio
 

Teresa Borges
ポルトガル
Local time: 14:29
2007に入会
英語 から ポルトガル語
+ ...
@Teresa Apr 8

Please check this:

https://ec.europa.eu/info/sites/info/files/brexit_files/vat-services_en.pdf


 

Marjolein Snippe  Identity Verified
オランダ
Local time: 15:29
2012に入会
英語 から オランダ語
+ ...
My accountant agrees Apr 9

I had found conflicting and confusing information too, but most of the reliable sites seemed to agree with what Thomas is saying (and which is also in the document under Teresa's link, I just saw). Just to make sure, I checked with my accountant, who confirmed this.
On my invoices, instead of the indication "VAT reverse-charged", I now state "Out of scope of EU VAT".
I have had no complaint from my UK clients so far.

[Edited at 2021-04-09 08:32 GMT]


P.L.F.Persio
 

Laurent DI RAIMONDO  Identity Verified
フランス
Local time: 15:29
メンバー
英語 から フランス語
+ ...
SITE LOCALIZER
No VAT applicable Apr 9

Dear Teresa,

The rule is quite simple. Since the withdrawal of the United Kingdom from EU and since the end of the transition period (on 31 Dec. 2020), any supply of B2B services (whose translators are part of) by a EU business to a UK business is considered as situated outside the EU and therefore not taxable under EU VAT legislation.

Thus, you don't have to charge your invoice with any VAT rate nor VAT amount. However, never forget to mention your VAT number on your b
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Dear Teresa,

The rule is quite simple. Since the withdrawal of the United Kingdom from EU and since the end of the transition period (on 31 Dec. 2020), any supply of B2B services (whose translators are part of) by a EU business to a UK business is considered as situated outside the EU and therefore not taxable under EU VAT legislation.

Thus, you don't have to charge your invoice with any VAT rate nor VAT amount. However, never forget to mention your VAT number on your bill, because that's mandatory under EU VAT legislation.

As a matter of fact, it's not your business to bother about any VAT applicable, since you are NOT subjected to. On the contrary, it's your UK outsourcer's business to pay the corresponding VAT to his/her UK tax authorities according to the current VAT rate applicable in UK.

The contrary works the same on reverse. If you receive an invoice from a UK sub-contractor (for exemple), whom is therefore situated outside the EU and therefore not taxable under EU VAT legislation, you WILL have to pay VAT tax according to the current VAT rate applicable in YOUR country.

To put it in a nutshell, VAT between EU and any third country outside EU (like UK since the withdrawal) must be paid in the destination country, not in the coming country.

I hope I have been as clear as possible. If not, don't hesitate to ask.

Kindest regards.

P.S.: As pertinently suggested by Marjolein, I suggest to mention on your invoice "Out of scope of EU VAT".



[Modifié le 2021-04-09 19:29 GMT]
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Michael Wetzel  Identity Verified
ドイツ
Local time: 15:29
ドイツ語 から 英語
Just wondering if this is correct in the case of the UK Apr 10

I've maybe only ever had one and certainly not more than a handful of UK clients over the years and none of them were B2C, but I'm still curious about this issue.

In the EU, to the best of my knowledge, translators and other members of the "liberal professions" have always enjoyed an exception from the need to collect and report local VAT in non-EU foreign countries ("third countries") for services provided to customers in those foreign countries. I have often dealt with Swiss priva
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I've maybe only ever had one and certainly not more than a handful of UK clients over the years and none of them were B2C, but I'm still curious about this issue.

In the EU, to the best of my knowledge, translators and other members of the "liberal professions" have always enjoyed an exception from the need to collect and report local VAT in non-EU foreign countries ("third countries") for services provided to customers in those foreign countries. I have often dealt with Swiss private and business customers and I have always done things in keeping with the information provided by Teresa (no VAT on the invoice, notice on the invoice about why no VAT is being charged, not reported in Switzerland and reported in Germany in the appropriate place on my German VAT returns).

In a parallel thread looking at this issue from the opposite perspective (UK translators selling their work to European clients), RobinB posted a very helpful guide from the UK's Institute of Translators and Interpreters, which also contains links to official (HMRC) sites that are very clear about this topic. They very plainly state that the UK is not handling things in this way and that translators in the UK need to charge and report local VAT when they work with private customers in EU countries. That seems counterintuitive to me, but I can't see any other way to interpret what HMRC is saying.

https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec3
3. Place of belonging
3.1 Introduction
The place where a supplier or customer belongs will determine where the service is supplied and who accounts for any VAT due in the following cases:

B2B general rule services: supplied where the customer belongs (see paragraph 6.3)
B2C general rule services: supplied where the supplier belongs (see paragraph 6.2)
specific B2C services are also supplied where the customer belongs (see section 12) [...]

12. B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK
12.1 Introduction

This section applies if:

you belong in the UK
you supply B2C services to customers who belong outside the UK
those services are included in the list in paragraph 12.2

Where this applies, your services are supplied where your customer belongs and so are outside the scope of UK VAT. It’s the nature of the service that you should consider, rather than your professional qualification or status. [...]

12.2 Services treated as supplies

The following services are treated as supplied in the place where the customer belongs when provided to non-UK non-business customers:

transfers and assignments of copyright, patents, licences, trademarks and similar rights [...]
services of consultants, engineers, consultancy bureaux, lawyers, accountants, and other similar services - data processing and provision of information, other than any services relating to land [...]

12.6 Services of consultants, engineers, consultancy bureaux, lawyers, accountants, and other similar services - data processing and provision of information, other than any services relating to land

This covers a wide range of services of different natures. [...]

Examples include:
written translation services or interpreters’ services which do not take place at an event conference

*****
I would tend to assume that the EU is going to keep doing things the way they have, but there is good reason to wonder if the UK might need to be treated differently than other non-EU countries here (I don't know if things will be permitted to be treated in opposite ways depending on the direction the service is going). This is also precisely the kind of obscure question that you can't necessarily trust a tax preparer to answer correctly, because the correct answer may be counterintuitive, related to foreign tax law and highly specific. In order to pay for their knowing or looking up every detail like this, they would have to charge thousands of euros per hour: Some things just have to be accepted as obvious and assumed, but the obvious assumption appears to be at potentially wrong here.
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Teresa Zuhl
ドイツ
英語 から ドイツ語
TOPIC STARTER
Thank you so much! Apr 12

Dear colleagues,

Many, many thanks for all the information, insights and advice! It sounds really straighforward now and I'm relieved that the only thing that changes is the reason why we don't include VAT on our invoices. I had read somwhere online that VAT would have to be paid in the UK and every supplier of services would need to register for that in the UK so I'm very glad that's not true. Thank you so much for clarifying!

Have a lovely week ahead!

Ter
... See more
Dear colleagues,

Many, many thanks for all the information, insights and advice! It sounds really straighforward now and I'm relieved that the only thing that changes is the reason why we don't include VAT on our invoices. I had read somwhere online that VAT would have to be paid in the UK and every supplier of services would need to register for that in the UK so I'm very glad that's not true. Thank you so much for clarifying!

Have a lovely week ahead!

Teresa
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