2

I'm managing a french company where the VAT must be applied, and I am stumbling upon a problem that annoys me.

There is a simple form to know if the VAT must be applied or not (please tell me in case I'm wrong on that) :

Seller EU (me) =>
    Outside EU : no VAT
    Inside EU :
        Customer not a business : apply VAT
        Customer's a business : apply VAT ? <== It's my problem

Ok. (This comes from an article from the TheNextWeb which is linked below)

I took a look at how quaderno.io works, since it's their target, I believe they must be right, so I used their demo : https://quaderno.io/features/checkout/ and tested for my company in France.

When I entered my VAT Number, they removed the tax (from 10$+20% to only 10$).

BUT, the problem is the following :

I asked my accountant if, when making an invoice from a French company to an other French company, I should remove the 20% tax. She said no. I must indicate my VAT number AND the VAT number of the client, and that's it.

The 20% tax still applies and the client must do it's paper work to get back the tax he paid from the state (France), not the issuing company.

So, as far as I understand, Quaderno is not right for France as I should still pay 12$ (10$ + 20%).

But the explanation given by TheNextWeb and how Quaderno works raise me an other question :

They both remove the VAT tax when the company enters it's VAT number, which leads me to believe that in some EU countries, if the VAT number is given, the service must remove the tax from the invoice.

Is this right ? In that case, in which countries we must remove the tax when invoicing the client, and in which countries (like France) we still must keep it ?

Thank you for your help and feel free to ask for more details if it isn't the case.

2

If you are a small business, you apply VAT the same way as you would apply it for customers of your own country.

There is a threshold for sales made to a certain country. If you do not exceed that threshold, you can apply your own country's VAT rules to customers from that country and deliver VAT to your own tax office.

If you do exceed that threshold, then you have to worry about other countries' VAT laws. But if you exceed those thresholds in any country, you have enough money to hire a tax advisor.

What those thresholds are depends on the customer's country. You can find a table here: http://www.vatlive.com/eu-vat-rules/distance-selling-eu-vat-thresholds/

  • Thank you for your response. So in France, since I have to apply VAT no matter what (business or not), I would do the same for all the other EU countries that have VAT ? And would I have to apply the France VAT tax or the tax specific to their country? Thank you for your explanation. – Cyril N. Nov 5 '15 at 9:03
  • If you don't exceed the threshold, you charge French VAT and deliver it to the French tax office. – fNek Nov 5 '15 at 9:49

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.