| Pages in topic: [1 2] > | Invoicing EU and non-EU client using online payment Stripe/Wise Thread poster: Yuri Alwis
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Yuri Alwis
Belgium
Local time: 11:58
Member (2022)
English to Indonesian
+ ...
Hello Everyone,
I reside in Belgium and new to invoicing procedures. I then came accross this thread while searching forum about how to invoice clients within EU. Maybe it has been discussed before, perhaps someone know a link to the discussion on how to invoice clients within the EU and outside EU, especially if they make the payment through online payment like STRIPE, or Wise?
From my understanding, the invoice should mention:
1) Invoice Number (should ... See more Hello Everyone,
I reside in Belgium and new to invoicing procedures. I then came accross this thread while searching forum about how to invoice clients within EU. Maybe it has been discussed before, perhaps someone know a link to the discussion on how to invoice clients within the EU and outside EU, especially if they make the payment through online payment like STRIPE, or Wise?
From my understanding, the invoice should mention:
1) Invoice Number (should it be sequential, what if we have clients who uses online payment liek STRIPE, which automatically generates the invoices, thus random invoice number). Should we also issue ourself another invoice (based on that STRIPE invoice), with sequential invoice and sent to the client for the sake of our accounting report?
2) My VAT number and the client VAT
3) The mention of "Provision of service of intra-community/European Union? - Exemption from VAT, Reverse charge" - (for clients within EU) or out of scope EU VAT - for clients outside EU). What if it is an invoice for a private client who sent the payment through Wise?
4) The mention of "Please make payment via STRIPE Account/Payoneer/Paypal/Wise" - should I also detailed my Professional Bank Account number underneath it if the payment made through online payment?
Is there perhaps any template of such invoice that you can share to have an idea?
Thank you for any clarifications you can share about this matter, as I am quite lost searching through the internet and ProZ...and sorry to ask again if this has been discussed previously. ▲ Collapse
| | | | Samuel Murray 
Netherlands
Local time: 11:58
Member (2006)
English to Afrikaans
+ ...
Yuri Alwis wrote:
From my understanding, the invoice should mention:
1) Invoice Number (should it be sequential, what if we have clients who uses online payment liek STRIPE, which automatically generates the invoices, thus random invoice number). Should we also issue ourself another invoice (based on that STRIPE invoice), with sequential invoice and sent to the client for the sake of our accounting report?
Yes, the translator should issue the invoice. Even if the client issues a document that they call an "invoice", you can't use it as your invoice for record-keeping purposes unless it complies with local regulations regarding invoices (including e.g. having a valid invoice number or having your/their VAT number on it). The document that the client produces (that the client calls an "invoice") isn't really an invoice, but just some document that is useful for you to create the actual invoice.
3) The mention of "Provision of service of intra-community/European Union? - Exemption from VAT, Reverse charge" - (for clients within EU) or out of scope EU VAT - for clients outside EU). What if it is an invoice for a private client who sent the payment through Wise?
Well, the intra-community arrangement is only for business-to-business transactions in which both entities have an EU VAT number, and where the entities are in two different EU countries. If your client doesn't have an EU VAT number, then you have to follow your local laws about whether to charge them VAT. In my own country (Netherlands), if the client is in my own country but doesn't have a VAT number, then I have to charge VAT, but if the client is not in my own country and doesn't have a VAT number, then I don't charge any VAT. But Belgian laws may be different.
This means that if a private client pays you directly, and he doesn't add VAT, then you have to deduct the VAT yourself as if the client had paid VAT. E.g. if the job is for EUR 100 and the VAT rate is 21%, then the client should pay EUR 121... but if he pays before you have had the opportunity to create an invoice, and he ends up paying only EUR 100, then you have to take a 21% loss on the job and re-calculate it on your updated invoice as EUR 82.64 + EUR 17.36 (VAT) = EUR 100.
Useful website: https://vatcalconline.com
4) The mention of "Please make payment via STRIPE Account/Payoneer/Paypal/Wise" - should I also detailed my Professional Bank Account number underneath it if the payment made through online payment?
You should list the ways in which you want to get paid at the bottom of your invoice. Make it clear which information is for which payment method. I use a bulleted list that lists the various options alone with each option's account details.
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The rules for VAT in the EU are laid down by the EU's VAT Directive.
For our profession, the following applies:
Client of any kind domiciled in the same Member State as you
You need to add VAT at your local rate to the invoice in all cases.
VAT-registered client in the EU's VAT area (not exactly the same as the EU), ... See more The rules for VAT in the EU are laid down by the EU's VAT Directive.
For our profession, the following applies:
Client of any kind domiciled in the same Member State as you
You need to add VAT at your local rate to the invoice in all cases.
VAT-registered client in the EU's VAT area (not exactly the same as the EU), except if the client is domiciled in the same Member State as you
Reverse VAT. The client accounts for VAT in their own country. You must validate their VAT number in the EU's VIES system and mention it on the invoice.
Clients in the EU's VAT area without a VAT number
The VAT Directive defines the place of supply as your own address, so you must add VAT at your local rate.
Clients of any kind outside the EU's VAT area
No EU VAT is due. Some Member States like Portugal may still require you to report their TIN (tax ID number) on the invoice, others not. ▲ Collapse
| | | | Yuri Alwis
Belgium
Local time: 11:58
Member (2022)
English to Indonesian
+ ...
TOPIC STARTER | @ Samuel and Thomas | Jul 22, 2023 |
Thank you for your concise explanations, and tips, there are very helpful !
The amount in the invoice that we made for the client using online payment is based on the net amount we received (meaning already deducted with the fee of the online payment), right?
Can we still issue the invoice for the already received amount of payment in our bank account? The issue date should be before the date we received ... See more Thank you for your concise explanations, and tips, there are very helpful !
The amount in the invoice that we made for the client using online payment is based on the net amount we received (meaning already deducted with the fee of the online payment), right?
Can we still issue the invoice for the already received amount of payment in our bank account? The issue date should be before the date we received it on our account? ▲ Collapse
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| Invoice is for the work provided | Jul 22, 2023 |
Yuri Alwis wrote: Thank you for your concise explanations, and tips, there are very helpful ! The amount in the invoice that we made for the client using online payment is based on the net amount we received (meaning already deducted with the fee of the online payment), right? Can we still issue the invoice for the already received amount of payment in our bank account? The issue date should be before the date we received it on our account?
An invoice is a statement of how much is owed by the client and for what. It has nothing to do with how the money is paid or whether payment fees are deducted underway. The invoice amount should correspond to the agreed price. Fees deducted are a business expense you can deduct based on the invoices for or other documentation of the fees – unless you have agreed with the client that they can deduct their own payment fees (but why would you do that?).
I don't know your billing cycle. I think most issue dates are the last day of the month being billed. It doesn't matter if the client paid before the invoice was issued. You just need to be aware that issue dates must always progress. You are not allowed to issue e.g. invoice no. 22 with a date of 22/7 and then invoice no. 23 with a date of 15/7.
| | | | Samuel Murray
Netherlands
Local time: 11:58
Member (2006)
English to Afrikaans
+ ...
Yuri Alwis wrote:
The amount in the invoice that we made for the client using online payment is based on the net amount we received (meaning already deducted with the fee of the online payment), right?
If you create invoices after the client has paid, then you have the option of making up the invoice with the nett amount (i.e. the exact amount that become available to you after the transaction fees have been paid). However, I don't do this myself. When I make an invoice after a client had paid, I use the full amount that the client has paid (i.e. the amount that PayPal or Wise says that I have received), and then I treat the transaction fee as a business expense.
So, if I send an invoice for EUR 1000, and the client pays EUR 1000 via PayPal, and PayPal deducts EUR 50 for a transaction fee, then I write the EUR 50 as a business expense in my accounting. If the client pays EUR 1000 without an invoice, and PayPal deducts EUR 50 for a transaction fee, I make the invoice for EUR 1000 (not EUR 950), and I write the EUR 50 as a business expense in my accounting. That is what I do, but if your local accounting laws allow you to make up the invoice for EUR 950 (since that is the amount that you "get" in the end), then you can do that too.
Can we still issue the invoice for the already received amount of payment in our bank account?
To keep your financial administration in order, you MUST create an invoice for each job or for each payment that you receive. So if a client pays without an invoice, you must create a dummy invoice and include that in your usual accounting (even if the client doesn't actually want you to send him the invoice). It's a good idea to include a note on the invoice that the invoice relates to a "payment in advance".
The issue date should be before the date we received it on our account?
The invoice's issue date should be the actual date on which you actually create the invoice. So if you do a job on 10 January and you neglect to create an invoice until 25 March, then your invoice date should be "25 March" (although the invoice will also state the date of the job, which is 10 January). So, if a client pays without invoice on 15 February, and you create the invoice on 5 March, then the invoice date should be "5 March" even though you received the payment on 15 February and even though you did the job on 10 January (although it's wise to mention the other dates on the invoice as well -- your local laws may even require that you mention the date of the job itself).
| | | | Samuel Murray
Netherlands
Local time: 11:58
Member (2006)
English to Afrikaans
+ ...
Thomas T. Frost wrote:
You just need to be aware that issue dates must always progress. You are not allowed to issue e.g. invoice no. 22 with a date of 22/7 and then invoice no. 23 with a date of 15/7.
Yes, although the simplest way of ensuring that is to use "today's date" as the invoice date when you create the invoice. Whether it's legal to back-date invoices (i.e. create an invoice on 30 January but give it the date of 25 January) depends on your local accounting laws.
An invoice is a statement of how much is owed by the client and for what. It has nothing to do with how the money is paid or whether payment fees are deducted underway.
I agree (in theory).
The invoice amount should correspond to the agreed price.
I agree, although it becomes tricky when the "agreed price" was an estimate. This is especially true when the price is determined by some kind of algorithm based on a number of variables. This is why, when a client pays before I had sent an invoice, and there hasn't been a formal purchase order that specifies the amount, then I use the amount that the client has paid.
If no actual amount has been agreed to, and if I'm expecting roughly EUR 1000 but the client pays EUR 850 (and PayPal then deducts EUR 50 transaction fee), then I put EUR 850 on the invoice. Ditto if I'm expecting roughly EUR 1000 and the client pays EUR 1200.
The ideal is that you should agree an exact amount with the client before the client pays it, but it doesn't always work like that. If the client issued a PO for EUR 1000 and pays only EUR 850 before I had a chance to create an invoice (and if the client then refuses to pay the remaining EUR 150 even though we agreed on EUR 1000), then I create an invoice for EUR 1000 (i.e. the agreed amount) and write the EUR 150 as a business expense (i.e. bad debt).
[Edited at 2023-07-22 10:44 GMT]
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Samuel Murray wrote: Thomas T. Frost wrote:
You just need to be aware that issue dates must always progress. You are not allowed to issue e.g. invoice no. 22 with a date of 22/7 and then invoice no. 23 with a date of 15/7. Yes, although the simplest way of ensuring that is to use "today's date" as the invoice date when you create the invoice. Whether it's legal to back-date invoices (i.e. create an invoice on 30 January but give it the date of 25 January) depends on your local accounting laws.
The problem is that some clients insist that the invoice date must be the last day of the month being billed, so if you don't or can't issue the invoice on that exact date, you need to backdate it a few days. I can see many different opinions on backdating online, so as you say, one needs to check local laws. My Portuguese accounting software TOC provided by the Portuguese Association of Certified Accountants allows backdating but will not let me backdate more than the latest existing invoice date.
As long as the purpose of backdating is not tax evasion or other ways of falsifying the amount of tax due, I doubt any tax inspector will be interested.
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| Invoices not in EUR | Jul 23, 2023 |
When my clients ask me to issue an invoice in a currency other than EUR, I always send a proforma invoice to that client issued in whatever currency (in my case it’s either GBP or USD) and, after being paid, I’ll issue an official invoice in EUR with the amount received in my bank account on the same date of the payment or the day before. My accounting software only allows me to backdate to the day after the latest existing invoice.
[Edited at 2023-07-23 10:21 GMT]
| | | | | Foreign currency | Jul 23, 2023 |
Maria Teresa Borges de Almeida wrote:
When my clients ask me to issue an invoice in a currency other than EUR, I always send a proforma invoice for that client issued in whatever currency (in my case it’s either GBP or USD) and after being paid I’ll issue an official invoice in EUR with the amount received in my bank account.
That's one way to do it.
As I have USD, GBP and other currency balances in my Wise account, I simply issue the normal official invoice in the currency concerned, and then it will match the amount credited to the respective balance.
This way, I don't need to issue two invoices, and I can choose when to change the foreign currency to EUR depending on exchange rate fluctuations. It also leaves me USD and GBP balances, so when I pay for Proz, for example, the amount in USD is debited directly from my USD balance.
And by the way, Wise now pays interest rates of 4.54% on GBP, 4.81% on USD and 3.06% on EUR, so it's better to leave the money with Wise than most banks, which don't pay interest on current accounts.
| | | | Yuri Alwis
Belgium
Local time: 11:58
Member (2022)
English to Indonesian
+ ...
TOPIC STARTER | Different currencies invoices | Jul 24, 2023 |
Thank you Samuel and Thomas for the more detailed inputs on how to calculate the amount of the invoice, it is really helpful !
@Maria-Theresa
Thank you for sharing. Now that you have mentionned about invoicing in different currencies, do you use the same sequential numbering for all your USD/EUR/GBP for the invoices made in different languages (english/portuguese/french, etc). Is your invoice are only in ... See more Thank you Samuel and Thomas for the more detailed inputs on how to calculate the amount of the invoice, it is really helpful !
@Maria-Theresa
Thank you for sharing. Now that you have mentionned about invoicing in different currencies, do you use the same sequential numbering for all your USD/EUR/GBP for the invoices made in different languages (english/portuguese/french, etc). Is your invoice are only in one determined language such as portuguese/english?
The final amount of each invoices (at the end of the month/date of reception of the payment of each currencies exchange rate) should then all be converted in EUR for the accounting report? Or do you keep different accounting for each currencies of each currencies bank account? ▲ Collapse
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Yuri Alwis wrote: Thank you for sharing . Now that you have mentionned about invoicing in different currencies, do you use the same sequential numbering for all your USD/EUR/GBP for the invoices made in different languages (english/portuguese/french, etc). Is your invoice are only in one determined language such as portuguese/english?
My software uses one single number sequence, but you can use separate sequences if you prefer.
The software I use lets me choose a bilingual Portuguese-English template, which I use. You always need to use your local language, but including English is helpful for your clients.
Yuri Alwis wrote:
The final amount of each invoices (at the end of the month/date of reception of the payment of each currencies exchange rate) should then all be converted in EUR for the accounting report? Or do you keep different accounting for each currencies of each currencies bank account?
It all needs to be converted to EUR for tax declaration purposes. How that is done can vary. You can see the official ECB reference rates on www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html, but whether it is the payment date or the invoice date to use depends on your type of accounting.
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Yuri Alwis wrote: Thank you Samuel and Thomas for the more detailed inputs on how to calculate the amount of the invoice, it is really helpful ! @Maria-Theresa Thank you for sharing . Now that you have mentionned about invoicing in different currencies, do you use the same sequential numbering for all your USD/EUR/GBP for the invoices made in different languages (english/portuguese/french, etc). Is your invoice are only in one determined language such as portuguese/english? I use one sequential numbering for proforma invoices and another one for the official invoices. My invoices are issued in my client’s language: French (I lived in Belgium for 30 years and Bureau Portugais de Traduction, BPT in short, started life there), English, Spanish and Italian. I only have very occasional Portuguese clients (they claim I’m expensive…😊) The final amount of each invoices (at the end of the month/date of reception of the payment of each currencies exchange rate) should then all be converted in EUR for the accounting report? Or do you keep different accounting for each currencies of each currencies bank account? The final amount deposited by my clients is always in EUR (that’s why I issue proforma invoices) and all the accounting is done in EUR (I don’t think the Portuguese tax authorities would allow it). May I suggest contacting a bookkeeper? Taxes are a mine field to navigate… The one I have in Lisbon since 2015 costs me around 110€ per month (the only thing he doesn’t do is the invoicing), and the one in Belgium until 2015 (when I moved back to Portugal) costed around 700€ per year. I promise it’s a money well spend…
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Maria Teresa Borges de Almeida wrote:
The final amount deposited by my clients is always in EUR (that’s why I issue proforma invoices) and all the accounting is done in EUR (I don’t think the Portuguese tax authorities would allow it).
Same price for my own Portuguese accountant. I had to sack the first one, though, as the only thing he did was to set up the company, and then he neglected the ongoing tasks, ignored emails, failed to provide the documents needed for paying the tax on rent, etc. The present one was recommended by a colleague and does what he needs to and also recommends tax-optimising measures. When I was in Germany, I had to sack no less than two incompetent accountants. In France: one. When you find a good accountant, keep him or her.
You are free to issue invoices and receive payment in foreign currency (my Portuguese official accounting software TOC can do it). There is no rule against that. Some less advanced accounting software just doesn't support foreign currency. I've never issued a single proforma invoice, as it isn't necessary this way.
You can run accounting in a foreign currency if that currency represents a major part of the company's transactions, and then convert one single currency amount to EUR at the end of the year. For more modest transaction volumes, you convert them one at a time. My accountant handles all the nitty-gritty details of the currency conversions. I just issue the invoices.
I agree with Maria Teresa Borges de Almeida: find an accountant to handle these things, especially as you clearly don't have much experience with them. Money saved on this could end up costing you much more in the end.
| | | | Samuel Murray
Netherlands
Local time: 11:58
Member (2006)
English to Afrikaans
+ ...
Yuri Alwis wrote:
Now that you have mentioned about invoicing in different currencies, do you use the same sequential numbering for all your USD/EUR/GBP for the invoices made in different languages (English/Portuguese/French, etc). Is your invoice are only in one determined language such as Portuguese/English?
The language used in your invoice depends on local laws. In my country (the Netherlands), invoices may be in either Dutch or English, so I opted for English. If a client were to request an invoice in another language, then the document that I send them would strictly speaking be a "translated copy of" the invoice, and the actual invoice in the correct language would remain in my own bookkeeping.
Most countries' tax laws (and good bookkeeping principles) require that invoice numbers are sequential, or at least that later invoices should have higher numbers than previous invoices. This applies regardless of the currency used. So, if invoice 0001 is in EUR, then invoice 0002 may be in USD, and invoice 0003 may be in EUR again. You should never have two separate invoices with an identical number in any given year. Some countries' laws allow you to reset the counter at the start of the year or the start of the financial year, though.
The final amount of each invoices (at the end of the month/date of reception of the payment of each currencies exchange rate) should then all be converted in EUR for the accounting report? Or do you keep different accounting for each currencies of each currencies bank account?
In general, you have to convert the amounts to your local currency before you file your taxes. I add all my invoices to a spreadsheet, and I have a column for the exchange rate and a column for the converted amount. I then pay taxes on the converted amounts. So, even though I write an invoice in USD (and I don't mention an EUR amount on the invoice at all), I end up converting the USD amount to EUR in my bookkeeping and then I pay tax on the EUR amount.
According to my country's tax laws, the currency conversation rate is from the date of the invoice. So, if I did a job in January, I invoiced in February, and the client paid in March, it is the February exchange rate that is used when paying taxes (even if this means that the received amount is less or more than the invoiced amount, since the client makes the payment at a time when the exchange rate is different).
Differences due to differences in exchange rates can/should be calculated as business expenses or negative business expenses (aka additional income). Since I mostly work with stable currencies (EUR/USD), the difference between money invoiced and money received is generally so low that I don't take this into account in my accounting (doing so would make things a lot more complicated).
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