VAT Question

[JayoBeno]

Hello All, if you setup an affiliate company do you have to register for Vat?

As an affiliate there is no opportunity to charge Vat but if you are getting work done professionally on your website, the company would invoice you plus vat.

Im just looking for a way to claim back the vat charged for updating and maintain website?

[elgoog]

If you want to claim VAT back, i guess you have to register for it yes.
But how...etc. depends in wich country you live in i suppose

[Triple7]

1st question: where do you live?

[JayoBeno]

I am based on Ireland.

[Triple7]

Than Irish Google will invoice you with VAT. Google for example, because they're based in Ireland. Also Ireland-based webdesigners will charge you VAT. You will invoice Maltese companies withtout VAT and put that service on your ICL in your tax declaration.

[Christiaan]

If you set up a company you will also be able to charge VAT. But as most affiliate programs are registered in other countries you don't have to charge VAT.

[justbookies]

I am vat registered in the UK. It is a fairly complicated process. If your turnovers are below the threshold for vat registration then I wouldn't advise it because basically you will be too small to get an advantage in my view, with the lost time and added paperwork and extra accountancy costs. It is a real hassle to be honest and the rules are different for every jurisdiction and company you deal with (some 'standard rate', most 'outside scope', others 'reverse charge' and some firms a combination of those), but I am not on the UK's 'flat rate' option which may be simpler. Strongly recommend you speak to a specialist VAT accountant.

[wonderpunter]

If you set up a company you will also be able to charge VAT. But as most affiliate programs are registered in other countries you don't have to charge VAT.

If they are registered in the EU and you are based in the EU then you do.. or at least I do then every 3 months I declare and liquidate VAT or IVA as it's called in Spain, not just affiliates but anything.,. lucky for me 95% is from outside the EU so less bureaucracy

[Triple7]

I declare it also every 3 months. I also do prefer outside the EU, less bureaucracy. I also got a company outside the EU, so I always got more options what to do.

[Syndicate]

It's actually more simple than others are suggesting! If you register for VAT and the counter party is registered then you don't need to invoice it / or be invoiced - Just collect the counter parties vat number and check it out on the EU vat registry (online).

If the other party is outside the scope of the EU - their is no charge!

However, in Malta its slightly different since their is no vat on betting/gaming services - so if you deal with a Maltese company they can't charge you Vat. And, if they try to offer their VAT number in lieu, it won't save them paying it at a later date to the Maltese authorities!

Another option is to open a company outside the EU - but you might have difficulties when you repatriate payments to your country of residence - unless of course you invoice your other (non EU) company!

And, of course this only becomes interesting if you are making a proper living!

[justbookies]

It's actually more simple than others are suggesting! If you register for VAT and the counter party is registered then you don't need to invoice it / or be invoiced - Just collect the counter parties vat number and check it out on the EU vat registry (online).

If the other party is outside the scope of the EU - their is no charge!

However, in Malta its slightly different since their is no vat on betting/gaming services - so if you deal with a Maltese company they can't charge you Vat. And, if they try to offer their VAT number in lieu, it won't save them paying it at a later date to the Maltese authorities!

Another option is to open a company outside the EU - but you might have difficulties when you repatriate payments to your country of residence - unless of course you invoice your other (non EU) company!

And, of course this only becomes interesting if you are making a proper living!

Yes, Malta is reverse charge - which needs to appear on your VAT return even though it appears both sides, so just cancels itself out. Doesn't simplify anything as all transactions still need to be logged for the VAT return every three months. I would be very wary of opening an offshore company if you are within the EU - it is deemed a tax dodging scam unless your personal residence happens to have no direct taxation. In that case you are already living somewhere like the cayman islands, so the VAT issue is irrelevant.

[Triple7]

If they're checking here (EU) they want to see invoices, so not invoicing isn't a option for me. I do invoice sometimes my non-EU-company. Not too much. I think you've got to be careful with this if you need the money monthly. If not, go ahead, I would say.

[Christiaan]

If they are registered in the EU and you are based in the EU then you do.. or at least I do then every 3 months I declare and liquidate VAT or IVA as it's called in Spain, not just affiliates but anything.,. lucky for me 95% is from outside the EU so less bureaucracy

If you are registered in the EU and you do B2B with a different EU company that is not in the same country as your are then you don't charge the VAT, it is reverse charged.

http://ec.europa.eu/taxation_customs...s/index_en.htm

The supply of services between businesses (B2B services) is in principle taxed at the customer's place of establishment, while services supplied to private individuals (B2C services) are taxed at the supplier's place of establishment.

Example 19: For accountancy services supplied by a Bulgarian company to a business customer with his place of business in Austria, Austrian VAT must be charged. If the Bulgarian supplier is not established in Austria, the Austrian customer will account for VAT under the reverse charge mechanism.

So you don't charge VAT but put "reverse charge" on your invoice.

[wonderpunter]

If you are registered in the EU and you do B2B with a different EU company that is not in the same country as your are then you don't charge the VAT, it is reverse charged.

http://ec.europa.eu/taxation_customs...s/index_en.htm


So you don't charge VAT but put "reverse charge" on your invoice.

Interesting as my accountant makes me charge IVA on all my services to clients in the EU, most of biz is from outside but I do have some within So I will double check, but it is his business so I do have a certain level of confidence he is doing it correctly, I am not a Spanish accountant so rely on him heavily to make sure everything is above board

[Triple7]

Exact. And you've got to make an ICL for those "intra community" services, for example if you invoice commission to a Malta-based company. Supposing you're living in the European Union.

Normally your accountant shouldn't make you charge IVA to cliënts in the EU, but there except (ofcourse) some exceptions. In some cases you do have to charge. Although I don't think they apply on a situation of an affiliate marketeer.

It's quite a bunch of bureaucracy in the EU.

[RacingJim]

Interesting as my accountant makes me charge IVA on all my services to clients in the EU, most of biz is from outside but I do have some within So I will double check, but it is his business so I do have a certain level of confidence he is doing it correctly, I am not a Spanish accountant so rely on him heavily to make sure everything is above board

Don't overly rely on your accountant mate - they can **** it up just like anybody else.

[JayoBeno]

Thanks for the input & info, So in a nutshell if the income is coming from outside the EU vat is not an issue for me but if the income comes from an EU based company then vat is an issue.

I think a call to my accountant and see what his view is on it.

[RacingJim]

There is a VAT threshold where you have to register, it was around £80,000 VAT-able income last time I looked. Before that you don't have to register - it would only make sense if you were laying out lots of money on something that you could claim the VAT back on. Typical model for this business is low outgoings - home office, a PC, internet connection, some web/SEO skills, so there's not tons of VAT to claim back in that model so no point registering unless you are earning enough to force your hand.

Not 100% sure how that changes for PPC people who are investing money into Google PPC for example.

[wonderpunter]

Don't overly rely on your accountant mate - they can **** it up just like anybody else.

Normally I would but this country can be complicated when it comes to accounts, however will run it by another gestoria see what they think, it's not a big deal as most of my biz is outside of Europe but even still I might be able to claim something back.

[Christiaan]

Normally I would but this country can be complicated when it comes to accounts, however will run it by another gestoria see what they think, it's not a big deal as most of my biz is outside of Europe but even still I might be able to claim something back.

Yes it is a nightmare in Spain. I am trying to get some thins done in Spain too.

Do you have a small accountant or a bigger office? A bigger office with more international business should be able to help you better in this matter.