| Pages in topic: < [1 2] | Non VAT registered UK writer contracting Spanish translator VAT? Thread poster: HankCannon
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If Amazon is the seller, then it's their problem to collect VAT. You just collect the royalties from Amazon.
A VAT-registered person pays VAT on goods and services from domestic suppliers, then deduct the VAT paid, and collect VAT on his own invoices. For supplies from other EU member states, you pay them net of VAT but have to declare the VAT yourself as if you had collected it from a client, then deduct it.
However, a few types of activities are not taxable (for VAT).... See more If Amazon is the seller, then it's their problem to collect VAT. You just collect the royalties from Amazon.
A VAT-registered person pays VAT on goods and services from domestic suppliers, then deduct the VAT paid, and collect VAT on his own invoices. For supplies from other EU member states, you pay them net of VAT but have to declare the VAT yourself as if you had collected it from a client, then deduct it.
However, a few types of activities are not taxable (for VAT). Insurance is one example. There is no VAT on insurance. The VAT paid on expenses used for a non-taxable activity like that cannot be deducted.
Being paid royalties may not be considered a service, and if there is no service, then there is no VAT. In that case, you could still not recover VAT on expenses paid.
In fact, VAT is so complicated and so full of exceptions that if you try to do it yourself without professional advice, you may fall foul of some obscure rule.
Royalties is something completely different from translation, so you may only find limited help here. We're translators after all, not tax advisors ▲ Collapse
| | | | Michele Fauble 
United States
Local time: 18:43
Member (2006)
Norwegian to English
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[Edited at 2014-09-15 17:08 GMT]
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Thomas Frost wrote:
A VAT-registered person pays VAT on goods and services from domestic suppliers, then deduct the VAT paid, and collect VAT on his own invoices. For supplies from other EU member states, you pay them net of VAT but have to declare the VAT yourself as if you had collected it from a client, then deduct it.
So does this mean if I'm VAT registered, I don't end up paying VAT at all? (i.e I pay and claim back)
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HankCannon wrote:
So does this mean if I'm VAT registered, I don't end up paying VAT at all? (i.e I pay and claim back)
Yes, that is the net result; a VAT-registered business doesn't pay VAT (they may have to pay it up front, then claim it back). You then collect VAT from your customers (not all customers abroad though) and pay that on to the Treasury (less the VAT you paid). But this is on condition that your activity is not of the kind I described, which excludes the recovery of VAT paid.
I really, really think you ought to consult the Inland Revenue or an accountant to understand these things and get them right.
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Tim Drayton
Cyprus
Local time: 04:43
Turkish to English
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| I am not sure if you can get it back | Sep 15, 2014 |
HankCannon wrote: Thomas Frost wrote:
A VAT-registered person pays VAT on goods and services from domestic suppliers, then deduct the VAT paid, and collect VAT on his own invoices. For supplies from other EU member states, you pay them net of VAT but have to declare the VAT yourself as if you had collected it from a client, then deduct it.
So does this mean if I'm VAT registered, I don't end up paying VAT at all? (i.e I pay and claim back)
If it is the same system as in Cyprus - and maybe it is not - you just get a positive balance in your account with the VAT authority, and you can offset output VAT against it in the future, but you cannot get money back from them.
| | | | | Yes, you can get money back | Sep 15, 2014 |
Cyprus has to apply the same VAT Directive as everybody else, and you can get money back if you have paid more VAT on expenses than you have collected on invoicing. Cyprus must follow the rules too.
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Thomas Frost wrote:
Cyprus has to apply the same VAT Directive as everybody else, and you can get money back if you have paid more VAT on expenses than you have collected on invoicing. Cyprus must follow the rules too.
I guess it kind of makes sense to be VAT registered then no? Or are there negatives i'm not seeing?
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HankCannon wrote:
I guess it kind of makes sense to be VAT registered then no? Or are there negatives i'm not seeing?
It's not that simple. For those of your customers that are VAT-registered businesses in the EU (or any customer outside the EU), it makes no difference, as they don't pay the VAT anyway. In such a scenario, it's better to be VAT registered, as you can get your VAT expenses back.
But if you mainly sell to private customers in the EU, then it is an advantage that you can sell to them without VAT, as your prices are then lower. You can still take your VAT expenses (that you can't get back) into account when setting prices and still have a competitive advantage.
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Tim Drayton
Cyprus
Local time: 04:43
Turkish to English
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HankCannon wrote: Thomas Frost wrote:
Cyprus has to apply the same VAT Directive as everybody else, and you can get money back if you have paid more VAT on expenses than you have collected on invoicing. Cyprus must follow the rules too. I guess it kind of makes sense to be VAT registered then no? Or are there negatives i'm not seeing?
You will then have to complete a VAT return every quarter, or engage an accountant to do this.
See:
http://www.hmrc.gov.uk/vat/managing/returns-accounts/completing-returns.htm
| | | | Tim Drayton
Cyprus
Local time: 04:43
Turkish to English
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| This is a domestic matter | Sep 16, 2014 |
Thomas Frost wrote:
Cyprus has to apply the same VAT Directive as everybody else, and you can get money back if you have paid more VAT on expenses than you have collected on invoicing. Cyprus must follow the rules too.
A country's internal tax system is its own domestic matter and is not subject to EU directives.
| | | | 2GT
Italy
Local time: 03:43
English to Italian
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| EU VAT basic rules | Sep 16, 2014 |
Here are some basic rules to understand EU VAT mechanism:
http://bit.ly/1nZIg1m
Cheers
Gianni
| | | | | VAT is an EU matter, not domestic | Sep 16, 2014 |
Tim Drayton wrote:
A country's internal tax system is its own domestic matter and is not subject to EU directives.
VAT law is EU legislation in the form of a VAT Directive
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2006L0112:20110101:EN:PDF
(consolidated version including all amendments).
Each member state is obliged to transpose the VAT Directive into national law.
The VAT Directive leaves some options open to member states, but they can only choose their options where the Directive allows it.
The overall functioning of VAT is the same in all member states, and refunding VAT paid for business expenses is a fundamental part of the system.
You must be confusing VAT (subject to EU law) and income tax (not subject to EU law).
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