Tax and invoice question re: invoicing in USA for work done for European clients Thread poster: Nathan Horowitz (X)
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Nathan Horowitz (X)
United States
Local time: 16:51
Spanish to English
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Greetings, all. I recently moved home to the States from Europe and still have a few clients in Germany and Austria. Does anyone know about, or have experience with, invoicing clients in Europe from the USA? Anything special to put on the invoices? I suppose I shouldn't charge VAT anymore? Is there something special I need to do to declare the income on US taxes? Thanks.
| | | | RobinB 
United States
Local time: 15:51
German to English
| A few answers | Oct 3, 2017 |
Jumper Cable wrote:
Greetings, all. I recently moved home to the States from Europe and still have a few clients in Germany and Austria. Does anyone know about, or have experience with, invoicing clients in Europe from the USA? Anything special to put on the invoices? I suppose I shouldn't charge VAT anymore? Is there something special I need to do to declare the income on US taxes? Thanks.
Anything special?: You will probably have to add a note on your invoices about the recipient of the service being responsible for VAT/USt = reverse charge mechanism. Check with the clients on what their own particular requirements are.
VAT: If you're no longer registered for VAT in Europe, then of course you can't charge VAT.
Declaring income: Sit down with a CPA who has experience with small businesses who export services.
| | | | | Invoicing US > EU | Oct 3, 2017 |
You have to comply with US rules 'n' regs. So, you need to find out what US invoicing and taxation rules and regulations you have to comply with when invoicing clients in the UE. Sometimes you might need to be able to provide information about your UE clients, although not necessarily have to indicate that information on your invoices.
From your client's point of view, you present your bill and they have to pay it. There are sometimes small details that are required in one member s... See more You have to comply with US rules 'n' regs. So, you need to find out what US invoicing and taxation rules and regulations you have to comply with when invoicing clients in the UE. Sometimes you might need to be able to provide information about your UE clients, although not necessarily have to indicate that information on your invoices.
From your client's point of view, you present your bill and they have to pay it. There are sometimes small details that are required in one member state that are not required and although not necessary or life-changing for you, adding extra info actually on the invoic may make life easier for some clients.
The only way to be sure you get this right it to seek professional advice and/or check official sources in the US.
[Edited at 2017-10-03 14:44 GMT] ▲ Collapse
| | | | Jean Lachaud
United States
Local time: 16:51
English to French
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Why would you charge VAT, when you are based outside of the UE? No VAT charge in the invoice.
WRT to US taxes, all the money you receive from anywhere in the world must be declared in your tax return.
Ask your bank how much they charge for international wire transfers. You're in for an unpleasant surprise.
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RobinB
United States
Local time: 15:51
German to English
| Some things *are* required | Oct 3, 2017 |
Nikki Scott-Despaigne wrote: There are sometimes small details that are required in one member state that are not required and although not necessary or life-changing for you, adding extra info actually on the invoic may make life easier for some clients.
I'm not entirely sure what you mean by "that are required in one member state that not required and although not necessary ... for you", but in Germany at least, the tax authorities want invoices issued in both other EU members states and third countries for services such as translation to contain an indication that the recipient of the service is liable for VAT, and that the reverse charge mechanism applies. There is standard boilerplate (German and English) for this. It's not that this makes life "easier" for German clients: the tax authorities can deny recognition to supplier invoices that do not contain this information. So a supplier based in the U.S. has to include the information on their invoice or they risk not being paid (whereby the client has legitimate grounds for non-payment).
| | | | | the reverse charge mechanism... | Oct 4, 2017 |
... only applies to invoices from / to EU member states. You should not mention anything about VAT at all on your invoice. You can however mention your EIN number as most companies around the world like to have some kind of "tax id" number on an invoice.
| | | | RobinB
United States
Local time: 15:51
German to English
Lori Cirefice wrote:
... only applies to invoices from / to EU member states. You should not mention anything about VAT at all on your invoice. You can however mention your EIN number as most companies around the world like to have some kind of "tax id" number on an invoice.
At least for invoices from third countries to clients in Germany, suppliers have to cite the boilerplate about the recipient being responsible, and the reverse charge mechanism applying. The point is that the recipient still has to charge input tax on the service (at the national VAT rate), even if they can reclaim that input tax at the same amount in their tax return.
I read today that the EU is considering abolishing the VAT-free (not exempt!) sale of goods (and presumably services) across borders within the EU, so the reverse charge mechanism will be dropped in any case for intra-community sales.
| | | | Nathan Horowitz (X)
United States
Local time: 16:51
Spanish to English
+ ...
TOPIC STARTER
Thanks for your kind responses. You've given me a lot to think about.
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