Services abroad
April 26, 2017 | 50,00 EUR | answered by Steuerberater Udo Glinka
Dear Sir or Madam,
I am a small business owner in Germany and provide translations, proofreading, and book reviews for publishers and individuals. How should the following revenues/services be treated for me:
Reports, reviews for publishers in Switzerland,
Translations for entrepreneurs, institutions in the EU with VAT ID number,
Proofreading for individuals (e.g. doctoral thesis) in Switzerland, Austria and Germany.
I believe that the last item falls under the small business turnover, but I am not sure about the other revenues, whether catalog services should be considered. Do I also need to make a recapitulative statement? Thank you in advance for your response.
Dear Seeker,
based on the information provided to me, I will now give you my initial assessment.
I assume that your question is specifically regarding the assessment of value-added tax (VAT).
The services you have provided are generally considered as other services for VAT purposes. Whether they are taxable is determined by §3a UStG.
According to this provision, in the case where a German entrepreneur provides an other service to another entrepreneur, the place of supply is always where the recipient of the service is located. If the recipient is located abroad, the transaction is not subject to VAT in Germany.
In order to avoid having to register for VAT in another country to comply with any potential VAT obligations, there are usually provisions in the respective country for the reverse charge mechanism, where the liability for VAT is shifted to the recipient in the foreign country.
This applies to both EU and non-EU transactions.
Even in transactions with customers who have a VAT identification number, a small entrepreneur is not required to submit an Intrastat declaration (§18a para. 4 UStG).
Transactions that are not subject to VAT in Germany are not included in the relevant small entrepreneur turnover.
However, this is different for transactions with private customers. For private customers, the location of the supplying entrepreneur is generally decisive. Since your company is based in Germany, the transactions are taxable in Germany and would be included in the small entrepreneur turnover if you qualify as a small entrepreneur.
In my opinion, the services you have listed do not fall under the services listed in § 3a para. 3 UStG, as they do not appear to be cultural, artistic, scientific, or educational in nature. The services listed in para. 4 also do not seem relevant to me.
I hope this information has been helpful to you.
Best regards,
Udo Glinka (Tax Advisor)
