VAT on IT services between two EU countries

[maxipoint]

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]

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

 

[CyprusLawyer101]

Yes. Vat can be avoided. Have you considered a Cyprus company as an option ?

 

[lostguy]

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]

CyprusLawyer101 said:
Yes. Vat can be avoided. Have you considered a Cyprus company as an option ?
Click to expand...

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

Which in its turns gives away tickets to

Toggle signature

@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields​

 

[NicolasMaduro]

maxipoint said:
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?
Click to expand...

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]

maxipoint said:
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?
Click to expand...

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.