What special regulations apply to the taxation of services provided abroad?
December 14, 2022 | 40,00 EUR | answered by Friedhelm Sauer
Dear Sir or Madam,
I am reaching out to you as a business owner who provides services abroad and is unsure about the specific tax regulations for services provided internationally.
Currently, my company offers virtual assistant services to international clients. We mainly provide our services to businesses in other EU countries, but also occasionally to clients from third countries. Up until now, we have solely focused on the German market and paid the corresponding VAT.
Now, I am wondering how to properly tax the services provided abroad. I have heard that there are many specific regulations that need to be considered in order to avoid any mistakes in VAT calculations.
My main concern is that I may not correctly comply with the legal requirements and could face tax-related issues. Therefore, it would be very helpful if you could explain to me in detail what specific considerations need to be taken into account when taxing services provided abroad, and how to implement them in practice.
What kind of documentation do I need to keep, and what are the tax rates for my services in different countries? Are there any exceptions or special regulations that I need to consider?
I appreciate your assistance in advance and look forward to receiving your comprehensive information and proposed solutions.
Best regards,
Alice Völker
Dear Mrs. Völker,
Thank you for your inquiry regarding the taxation of services provided abroad. As a tax consultant specializing in VAT issues, I would be happy to assist you and provide you with the relevant information.
When you as a business owner provide services abroad, there are indeed some specific considerations to be aware of regarding taxation. Firstly, it is important to note that services provided to businesses in the EU are generally taxed there. This means that in this case, you are not allowed to invoice German VAT, but must instead remit the VAT in the recipient country.
Different rules apply for services provided to customers in third countries. In general, no VAT is invoiced in these cases, as long as the recipients are located outside the EU. However, there are exceptions and specific rules depending on the country and type of service.
To correctly implement the taxation of services provided abroad, it is crucial to keep accurate records. This includes documenting the services provided, invoicing, and providing proof of taxation in the recipient country. It is recommended to familiarize yourself with the tax regulations in the respective countries and seek professional assistance if necessary.
Tax rates for services can vary depending on the country. In most EU countries, similar tax rates to Germany apply, usually between 19% and 25%. It is important to research the specific tax rates in advance to avoid errors in taxation.
There are also exceptions and special regulations that need to be considered when taxing services provided abroad. For instance, there are specific regulations for digital services that have been uniformly taxed since 2015. It is advisable to be informed about such special regulations and take appropriate action if necessary.
Overall, it is important to thoroughly research the tax regulations in the recipient country to avoid taxation errors. I am available to assist you in implementing the taxation of services provided abroad and to provide you with comprehensive information and solutions.
I hope this information has been helpful to you, and I am available for any further questions you may have.
Best regards,
Friedhelm Sauer
