Small business and reverse charge invoice to EU countries
August 26, 2018 | 40,00 EUR | answered by StB Steffen Becker
Situation:
I am a small business owner and will be providing a service (Affiliate Marketing) in another EU country.
Question:
What do I need to consider for correct invoicing:
* According to my research, I will need a VAT ID for this. Do I need to submit VAT returns, even though I will not be paying any VAT?
* For an invoice, I would include my VAT ID and the recipient's VAT ID, along with a note about "Reverse Charge." Are there any other notes/information that need to be included on the invoice?
* Are there any other potential pitfalls to be aware of?
Dear inquirer,
Thank you for your inquiry. I will answer this within the scope of an initial consultation based on the information provided. Missing or incorrect information can affect the legal outcome.
As a small business owner, you can provide or receive intra-community services and obtain a VAT identification number. If you receive other services from another EU member state as defined in § 3a (2) UStG, you are subject to VAT in Germany and must submit VAT returns. Input tax deduction is not possible. However, as a small business owner, you are required to pay German VAT to the tax office.
When it comes to services covered by the reverse charge procedure (§ 13b UStG), a distinction must be made: If you are the recipient of the service as a small business owner, you become the taxpayer (§ 19 (1) sentence 3 UStG), if you are the provider, there is no transfer of taxpayer status to the recipient (§ 13b (5) sentence 8 UStG) - so no reference to the reverse charge procedure! If you deliver goods or provide services to a business based in another EU member state where they are liable for tax, as a small business owner you are not required to submit a summary declaration (§18a (4) UStG).
I hope this information was helpful.
Sincerely,
Steffen Becker
Tax Advisor
