I'm an independent IT consultant in the US, and I just completed some work for a German company, all done remotely from the US. I've sent them an invoice, but they are now asking if I have a VAT registration ID, which I don't have of course not being in Europe. Do I have to do anything about the German VAT tax? Is it up to the company I worked for to sort this out?
closed as off topic by thorsten müller, ChrisF♦ Jun 21 '12 at 7:52
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Disclaimer: I am no laywer either, but I do handle VAT matters for a small German business, so I know a bit about VAT in Germany.
From what I know and could gather on the Internet, it's like this:
Finally, it may well be the case that neither you nor the customer paid any VAT. Then there's nothing to refund. Just tell your customer that.
I would first send a message saying I'm not in eu and they don't need to pay anything.
If their accounts can't deal with this you may have register with their tax authorities - but you can probably register anywhere in the EU (eg UK if English is easier). Having a VAT number means they don't pay the tax - basically businesses are able to deal VAT-Free with each other, it's only the end consumer that pays So ironically they are asking if they have to pay tax on what they paid you.
There is also a limit below which you don't need to register for VAT (or charge VAT to your customers) - this is typically around $100-150K of turnover/year. But if you mostly deal with other companies it might be worth it, just because their accounts expect it and you can claim back VAT on anything you buy