ForThe biggest problem that an entrepreneur encounters when he wants to invoice abroad is the issue of VAT. In the case of cross-border invoicing, this also applies to non-VAT payers, who may have VAT obligations. Both in the Czech Republic and in another country. In general, the issue of VAT in foreign trade is quite complex and it is best to consult a tax advisor for a specific case. However, in this article we will draw attention to some selected situations that may lead to the need to deal with VAT.
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Services invoiced under the so-called basic rule to a chinese overseas canada database taxable person in another EU Member State
The VAT Act distinguishes between services provided under the basic rule and services provided under the special rules. If a service does not fall under any of the special rules for determining the place of supply, the tax regime is governed by the basic rule. These include, for example, consulting services, marketing services, services of programmers and other IT experts, graphic work, etc.
If, according to the basic rule, you provide services to a customer who is a so-called taxable person with a registered office in another member state of the European Union (hereinafter referred to as “EU”), you are obliged to issue an invoice – or a tax document under the reverse charge regime .
Who is a taxable person ? In simple terms, every entrepreneur – even non-VAT payers. And in certain cases also some state organizations or so-called non-profit organizations. However, it is better to check with them whether they are or are not a taxable person, because they can act both as a taxable person and as a non-taxable person. Non-taxable persons are non-entrepreneurs – consumers.
A non-taxpayer who provides a service to a taxable person (entrepreneur) established in another EU country is obliged to register as an identified person .
The provision of a service to a taxable person established in another EU member state is obligatory for both the payer and the identified person to report in a summary report and also in a VAT return .
Tax document requirements
Since the tax liability is transferred by the supplier to the elevate your living experience with luxury apartments recipient of the performance, the VAT rate stated on the tax document is zero – VAT is not payable on such an invoice. At the same time, the tax document must state the sentence “taň odveľ krajník”, literally in Czech.
This means that you will issue a tax document in the same manner as for a Czech customer, i.e.:
A tax document can be issued in a language other than Czech . The law does not limit the language. However, if the tax administrator requires a translation, the entrepreneur is obliged to provide the translation at his own expense. It is therefore better to use one of the widespread languages such as English, German, etc.
The tax document can also be issued in a foreign currency. Any thailand data of the legal freely convertible currencies can be used – according to the exchange rate list of the Czech National Bank . We recommend avoiding various virtual currencies such as bitcoin, etc. In the Czech tax environment, this entails unpleasant tax risks.
Example
A VAT non-payer provided consulting services to ABC sro, a company based in Slovakia. ABC sro provided its full invoicing details, including a valid EU VAT number SK123456. The agreed price for the consultation was EUR 100 and the customer and the supplier agreed on invoicing in English. How should the supplier issue a tax document? What other obligations did it have in connection with invoicing?
Tax document For requirements
The supplier issues an invoice in the reverse charge mode . He states the customer’s complete invoice details, including his VAT number, which he has previously verified as valid on VIES. The tax document can be issued in euros and in English. There is no obligation to convert the tax base into CZK on the tax document. This obligation applies only to the tax itself. However, in this case, it is zero. The supplier (now an identified person) will only convert the tax base into CZK for the purposes.