VAT On Euro Invoice

[jeffersonuk]

Hi All,

First post on Contractor UK so hopefully I will find someone to assist with my strange predicament.

I have recently secured a contract with a UK agency for a a position working offshore in Germany for a conglomerate construction company. I have completed the first rotation and now it is time to invoice for the month of October. Problem I have is although the contract is between myself (UK Ltd Company) and the UK Ltd agent I am being paid in Euros and wondered if I should be charging VAT and if so how do I go about calculating it with euro/sterling?

I know the "place of supply" is currently a big thing on the HMRC radar at present and I naturally want to keep things above board and fully compliant but I just cannot seem to get a straight answer from anyone.

So in essence I am a UK limited company (VAT registered) providing services offshore in Germany via a UK registered agent whilst being paid in euros..... To say confused would be an understatement.

Any assistance would be appreciated.

Thanks in advance

[SueEllen]

If you are working in Germany you should be paying tax in Germany.

You are likely to find the German tax man chasing you in the UK for missing tax with penalties in the next few years. There is an entire thread about it which you can find by searching this forum via Google . It is called something like "Germany the taxman cometh".

Freedom of movement in Europe doesn't give you the right to pay taxes in any country you like.

The way to work in Germany is as a freelancer not through a limited company.

[TheCyclingProgrammer]

As far as VAT goes, generally the place of supply would be the UK as the agent is your client and they are based in the U.K. So you would charge VAT even if you're invoicing in euros.

Your bigger problem as pointed out above is that as you're working in Germany you could be liable for taxes there, including potentially German VAT and it's possible that your place of belonging might be considered to be Germany for the purposes of this supply (as it could be deemed that YourCo has an established base in Germany).

In other words, it's complicated. You need to speak to an accountant familiar with contracting and German tax rules.

[lecyclist]

VAT On Euro Invoice

As stated there are threads already covering this that you should read. At least one of which you can find linked to my name (regarding freelance or "freiberufler" status in Germany). If you do on reflection decide to change your tax status, note there is normally a 3 month window within EU to get your tax affairs in order (registering with local authorities etc). So seek advice asap.

In relation to VAT, for UK businesses getting paid in Euros, normally when they issue an invoice they also provide an invoice line stating the equivalent VAT in pounds. This aligns input and output VAT and makes it simple when you do your VAT return. The website below provides rates.

https://www.gov.uk/government/public...r-2016-monthly

Kind regards,
Lecyclist