What special rules apply to value added tax for cross-border services?
February 3, 2024 | 30,00 EUR | answered by Günther Hering
Dear tax advisor,
I am reaching out to you with a question regarding value added tax for cross-border services. I am the managing director of a company that regularly provides services abroad and have recently encountered issues with invoicing value added tax.
So far, I have been providing services in different countries without informing myself about the specific regulations regarding value added tax abroad. However, I have now realized that there are special rules and procedures that I seem to have overlooked.
My concern now is that I may have to make tax payments or face penalties and fines if I have not correctly implemented the applicable regulations. Therefore, I am looking for solutions on how to correctly handle value added tax for my cross-border services in order to avoid legal problems.
Could you please explain in detail the particularities regarding value added tax for cross-border services and the specific steps I need to take to comply with the legal requirements? I would greatly appreciate your support and expertise in this area.
Best regards,
Jens Stricker
Dear Jens Stricker,
I would like to thank you for your question regarding value added tax for cross-border services. It is important to consider the specific regulations in foreign countries in order to avoid legal issues. Therefore, I would like to explain in detail the specifics of value added tax for cross-border services and provide you with concrete steps you can take to comply with the legal requirements.
For cross-border services within the EU, the regulations of the EU Value Added Tax Directive generally apply. It is important to note that services to businesses in other EU countries are usually exempt from VAT, provided that the conditions for exemption are met. Therefore, it is important to verify the VAT identification number of the recipient and provide it on the invoice.
For services to individuals in other EU countries, however, value added tax is generally charged in the country of the recipient. The so-called Mini-One-Stop-Shop (MOSS) scheme can be used to simplify the VAT accounting. Under this scheme, you report the turnover in an electronic portal and pay the VAT to your own country's tax authority.
Different regulations apply for services outside the EU, which can vary by country. It is important to inform yourself about the specific regulations in advance and, if necessary, consult a local tax advisor.
To comply with the legal requirements and avoid potential tax liabilities or penalties, I recommend reviewing your previous invoices and making corrections if necessary. Additionally, you should familiarize yourself with the specific regulations in the countries where you provide services and consider seeking advice as needed.
I hope that this information is helpful to you and I am available for further questions. Thank you for your trust and attention.
Best regards,
Günther Hering
