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Reverse-Charge in England and evidence of entrepreneurial status

August 7, 2021 | 30,00 EUR | answered by Steuerberater Knut Christiansen

Hello,

I am soon launching an online consulting portal. The principle works as follows: The consulting service is sold through my invoice. The consultant working for me is also an entrepreneur and receives payment from me after deduction of a commission for me.

Now a consultant with residence in Italy and registered business in England has applied. The business license from the UK is available to me, but it is from 2018.

Since I am the recipient of the service, the place of supply would therefore be Germany. I would have to declare the received service in the reverse charge procedure, and the consultant would receive his credit note from me without VAT. Is that correct?

Does the reverse charge note need to be on the credit note?

And most importantly!!!!
What other evidence do I need to request from this entrepreneur as proof of their business? There is no VAT ID number for GB since 01.01.21.

But only the business license from 2018 seems too risky to me. What evidence should the entrepreneur provide me with so that I can confidently accept him as a consultant? I also have a copy of his ID card.

Thank you very much!

Steuerberater Knut Christiansen

Good day,

In principle, you are correct: you are a service recipient and therefore the place of supply according to Paragraph 3 (2) of the German VAT Act is in Germany. Therefore, reverse charge applies, so the procedure you described would be correct. The mention of reverse charge does not necessarily have to be on the credit note, but it is recommended for clarity.

As proof of your business status in the UK, please obtain a confirmation from the foreign tax authority. This confirmation must confirm that the supplier is registered as a business there.

I hope this answers your question, if not, please feel free to ask for further clarification.

Best regards,

Knut Christiansen
Tax advisor