VAT on IT services between two EU countries

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maxipoint

Offshore Agent
I am EU citizen and make computer services for a German company. I must register any EU-based firm. What best solution?

Can VAT be avoided? If my EU company is in VAT system, will VAT be nullified between my and German EU firm?
 

johndunham

Active Member
If both companies operate within the EU, the VAT can be nullified between the two companies. See: 'reverse charge mechanism EU'.
 

lostguy

Mentor Group Gold
Just get the VAT number from the other part and put it on the Invoice, so write on the invoice "reverse charge" for the VAT!
 

JohnnyDoe

Mentor Group Gold
Yes. Vat can be avoided. Have you considered a Cyprus company as an option ?
It’s not really “avoided”: VAT, contrary to sale tax (as in the US), follows a reallocation model that ends at the final customer. Not necessarily it is always convenient to reverse charge.

You can also use this model as a ticket for
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Which in its turns gives away tickets to
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NicolasMaduro

Entrepreneur
I am EU citizen and make computer services for a German company. I must register any EU-based firm. What best solution?

Can VAT be avoided? If my EU company is in VAT system, will VAT be nullified between my and German EU firm?
Doesnt matter with VAT? Cause the end cost is exactly the same for your customer.

If you incorporate in Germany you will invoice them 100.000 EUR excl VAT (119.000 EUR incl VAT), and then you will have to pay 19.000 EUR to the German government and they will deduct the 19.000 EUR. So end result is 100.000 EUR.

If you incorporate in another EU country you will charge them 100.000 EUR (Reverse Charge VAT).

So its the same result.

ANYWAY you must incorporate where you live because of effective place of management.
 

Gravity

Lawyer
I am EU citizen and make computer services for a German company. I must register any EU-based firm. What best solution?

Can VAT be avoided? If my EU company is in VAT system, will VAT be nullified between my and German EU firm?
If you could specify in a dm what you are doing exactly and where your main company is located, as well as the turnover, I might have an option to discuss with you.
 

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