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Is a residence certificate needed in EU if I have a valid EU VAT number?
Thread poster: Andrei Albu
Tim Drayton
Tim Drayton  Identity Verified
Cyprus
Local time: 04:11
Turkish to English
+ ...
From an agency in Greece Dec 22, 2014

I have just received the following note from an agency in Greece for which I have worked recently:

"For the avoidance of double taxation convention in accordance with interstate agreements signed between Greece and other countries, you should provide us with a tax residency certificate, once per year. Only original copy accepted. Without one, 20% will be deducted from each invoice you issue according to the Greek legislation with validity as from 1/1/2014. You will receive a compens
... See more
I have just received the following note from an agency in Greece for which I have worked recently:

"For the avoidance of double taxation convention in accordance with interstate agreements signed between Greece and other countries, you should provide us with a tax residency certificate, once per year. Only original copy accepted. Without one, 20% will be deducted from each invoice you issue according to the Greek legislation with validity as from 1/1/2014. You will receive a compensating foreign tax credit in your country of residence to reflect the fact that tax of 20% has already been paid."
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Thomas T. Frost
Thomas T. Frost  Identity Verified
Portugal
Local time: 02:11
Danish to English
+ ...
Looks like the Greek government has gone insane Dec 22, 2014

Tim Drayton wrote:

I have just received the following note from an agency in Greece for which I have worked recently:

"For the avoidance of double taxation convention in accordance with interstate agreements signed between Greece and other countries, you should provide us with a tax residency certificate, once per year. Only original copy accepted. Without one, 20% will be deducted from each invoice you issue according to the Greek legislation with validity as from 1/1/2014. You will receive a compensating foreign tax credit in your country of residence to reflect the fact that tax of 20% has already been paid."


If that is true (they don't refer to the part of which law says this), then it looks like their government has gone bonkers. Going to all this trouble can only be justified for significant amounts of revenue, so occasional small jobs for Greek agencies have effectively been made illegal by their government.

There is no guarantee, by the way, that the tax authorities of the translator's country will accept to credit Greek tax of 20% because according to the double tax treaty, that tax is not due in Greece.

We've been told for 21 years there is free movement of capital and services in the EU. Another lie, we can conclude.


 
Angie Garbarino
Angie Garbarino  Identity Verified
Local time: 03:11
Member (2003)
French to Italian
+ ...
Yes Dec 22, 2014

Thomas Frost wrote:

Looks like the Greek government has gone insane


I received the same 3 days ago, I am thinking to ask them to delete me from their database.



[Edited at 2014-12-22 12:27 GMT]


 
Thomas T. Frost
Thomas T. Frost  Identity Verified
Portugal
Local time: 02:11
Danish to English
+ ...
Protectionism Dec 22, 2014

It could be intended as a form of protectionism to make it so awkward to buy services outside Greece that companies prefer to buy from Greek companies. The country is bankrupt, after all.

 
Tim Drayton
Tim Drayton  Identity Verified
Cyprus
Local time: 04:11
Turkish to English
+ ...
This is more likely to be an externally imposed measure Dec 24, 2014

Thomas Frost wrote:

It could be intended as a form of protectionism to make it so awkward to buy services outside Greece that companies prefer to buy from Greek companies. The country is bankrupt, after all.


Yes, the country is bankrupt and that is why the government there has no sovereignty over economic matters at the moment - the Troika dictates policy to it. I suspect that this is some heavy-handed externally imposed measure to stem tax avoidance whose actual effects will probably not be those intended.


 
Andrei Albu
Andrei Albu
Romania
Local time: 04:11
Member (2002)
English to Romanian
+ ...
TOPIC STARTER
Log Update: Problem finally resolved! Jan 8, 2015

This is to let you know that the Greek client finally paid in full and also five days early. So, good reasoning won the case! I hope that the same happens to you, too.

Best wishes,

Andrei

Angie Garbarino wrote:

Thomas Frost wrote:

Looks like the Greek government has gone insane


I received the same 3 days ago, I am thinking to ask them to delete me from their database.



[Edited at 2014-12-22 12:27 GMT]


 
Tim Drayton
Tim Drayton  Identity Verified
Cyprus
Local time: 04:11
Turkish to English
+ ...
The certificate is issued by the Ministry of Finance in Greece Jan 13, 2015

I have had discussions with my accountants about this. They say that this is not the standard tax residency certificate, but one issued by the Ministry of Finance in Greece, which is then stamped by the tax authorities here. I don't know about elsewhere, but it seems that here in Cyprus that will attract a stamp duty of EUR 80 - in my case, more than the tax involved unless I receive repeat jobs. However, the accountants also say that the tax credit given to me in Greece can be deducted from my ... See more
I have had discussions with my accountants about this. They say that this is not the standard tax residency certificate, but one issued by the Ministry of Finance in Greece, which is then stamped by the tax authorities here. I don't know about elsewhere, but it seems that here in Cyprus that will attract a stamp duty of EUR 80 - in my case, more than the tax involved unless I receive repeat jobs. However, the accountants also say that the tax credit given to me in Greece can be deducted from my income tax in Cyprus. For me, the latter is the most rational option.Collapse


 
lumierre
lumierre
Local time: 03:11
Member (2013)
German to English
+ ...
Income tax - Corporate Tax - Fiscal residence certificate - Double taxation May 27, 2015

I have seen some misunderstanding on this issue and I think one needs to clarify that

1. the fiscal residence certification is needed only to clarify who pays the tax on income for a person contracted by a company, and to avoid double taxation
2. companies do not pay income tax, only persons pay income tax
3. case of two companies working together, none of them need to certify their fiscal residency under any law and this cannot be solicited as a prerequisite for making
... See more
I have seen some misunderstanding on this issue and I think one needs to clarify that

1. the fiscal residence certification is needed only to clarify who pays the tax on income for a person contracted by a company, and to avoid double taxation
2. companies do not pay income tax, only persons pay income tax
3. case of two companies working together, none of them need to certify their fiscal residency under any law and this cannot be solicited as a prerequisite for making payment (payment is not bound to provision of other services, such as providing such a certificate)
4. invoices between two companies, one with VAT and one without VAT, are based on "reverse charge" procedure (which has nothing to do with double taxation, or income taxation at source, as fruits have nothing to do with meat a.s.o.)
5. only in the case a company hires a physical person (unregistered as service provider), ONLY then the double taxation agreement applies and this person needs either to show she declares income at own fiscal authorities for taxation (by mean of a fiscal certificate) or the taxation will be generated at source (this is called taxation at source)
6. the taxation at source is done by ADDING the tax to the invoice, not withholding it, as the price has been negotiated as net,


of course, one should keep in mind
this opinion is
based on my research and competences but does not constitute any kind of legal advice or declaration

ps.
A Greek based company solicited me this certificate ,also, although I was trading as a company not as a person, but I preferred to leave them thinking they are smart
Indeed, things are going not well at all there... I feel sorry for them.

[Edited at 2015-05-27 18:21 GMT]
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Sheila Wilson
Sheila Wilson  Identity Verified
Spain
Local time: 02:11
Member (2007)
English
+ ...
But what about freelancers? May 27, 2015

Your points don't really seem to cover us.

lumierre wrote:
5. only in the case a company hires a physical person (unregistered as service provider), ONLY then the double taxation agreement applies and this person needs either to show she declares income at own fiscal authorities for taxation (by mean of a fiscal certificate) or the taxation will be generated at source (this is called taxation at source)


You talk about company to company elsewhere, and now company to private individual, but we're part way between the two, or at least those of us who haven't formed companies are. We may be registered as self-employed with our tax administrations, or we may not be officially registered if it isn't required (e.g. in the UK, the USA etc). We trade under our own names, as physical persons, not as legal entities.


 
S_G_C
S_G_C
Romania
Local time: 04:11
English to Romanian
Certificate of tax/fiscal residence Nov 15, 2015

I have been asked to provide such a certificate by the Bulgarian office of a European agency (don't remember which country right now). It is issued yearly and only originals are accepted.

I simply did it, it didn't occur to me to complain about it.

I am a freelancer and registered in VIES as well.


 
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Is a residence certificate needed in EU if I have a valid EU VAT number?







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