Why VAT is on clients and other FAQs

Yes, guys, that’s that time of the month: invoices time!

I don’t know about you, but this makes me insomniac. Why? Because I usually spend those nights trying to figure out a way to make my clients understand why a 21% VAT is applied on their invoices and don’t walk away from me with the feeling of “being cheated” I have every time they refuse my invoices because of that.

So, let’s get to basics, shall we?

I’ll make it short for you: « Each transaction of goods and services (and yes, translation is a “service”, if you are asking) between a European entity, natural or legal (meaning a person, a company or an agency) and a non-European entity, natural or legal, is subjected to a Value-Added TAX. »

For translation, in Belgium, a 21% VAT on the final amount of that transaction is applied.

Why should clients pay it and not vice-versa?

Well, let’s make it simple for you: if you are in America and you are buying a book in Italy, you’ll pay a 22%VAT on purchase. You are buying, you are paying.

If you are a non-European client or translation agency and you are buying a service in a European country… you buy, you pay. There’s no other way around. America has Trump, we have VAT. Live with it.

Or, as some non-European companies do, they buy a European VAT number. Everything can be bought in this world, even taxes. So, if you want to recover that 21% on your invoice, you should get one, and then… magic happens on your invoice and that “21%” becomes a “0%”. Incredible, isn’t it? The power of money.

I’ll give you another reason why VAT is on clients. VAT is a ‘tax’. A tax is supposed to ‘sanction’ something, in this case, it sanctions transactions done outside Europe. It shouldn’t sanction me, as a translator, but you, who live outside Europe. Why? Because being European these days is not very popular, I’d give you that, but it should at least count for something, don’t you think? Well, basically, it means you pay, sorry for that.

Can you lower your rate to assume the VAT expenses?

As a translator I find this question outrageous, but 80% of my non-European clients ask that, so… here your answer: NO!

Beside the fact that my rates are “non-negotiable” as specified here, sometimes clients try anyway to negotiate lower rates. Who can blame them? To ask is legal, to answer is courteous. Well, consider this, my official immutable courteous answer.

I’m not ruled by my rates, if a non-European client (without a registered VAT number)  – coming from Morocco, India or Lebanon, for instance, where translation rates are usually really low because living costs are low, of course -, instead of accepting my proposed €2/minute transcribed, offers me $1/minute transcribed, if I don’t have anything else to do (more rewarding), I would probably accept. Knowing, thou, that he will pay me $1/minute transcribed + 21% VAT.

Would you ask Amazon to pay for your books? No. That’s the same for translators. It’s outrageous and totally unethical refusing to pay the VAT or, even worse, asking me to ‘not produce an invoice’ (yes, I got that to). I don’t moonlight or support/do black labor.

And just to be clear, I’m not trying to scam you. Of that 21% you pay, I don’t see a cent. It goes into taxes. So, think carefully about it when you propose me half-my rate and then YOU scam me, refusing my invoice, making me lose time and patience re-negotiating a price we already agreed on, trying to pay me almost 80% less my usual rate.

I’ve never heard of VAT in all my 30 years of activity

Sorry about that. 

I approve invoices at the end of the month

Well, you can do your invoicing whenever you like, but if you do not object in a timely manner (meaning 7 working days tops), the invoice I sent you will be processed, associated with a contract, and there won’t any coming back from that. 7 working days, is your point-of-no-return, remember that.

Why?

Because I consider translators and project managers as extremely connected human beings. If I can answer your doubts and questions on a project I’m working on for you in less than an hour, revising an invoice when it arrives its due date is unprofessional and a total lack of respect for my work. The same respect I gave you, answering your questions.

And also because, if I grant you the trust of working for you first and pay me later (this usually happens for Proz.com members, of whom I have their detailed invoicing information), the least you could do is not making me lose my sleep over your refused invoice.

I don’t need/pay a VAT

Well, seriously who “needs” a tax? I guess no one. Me, I pay it. I can’t do anything about that. And since you are working with me, you are paying it too. If you don’t want to pay it, you are free to choose another translator.

I don’t need an invoice

Me, I need it. I’m forced to produce them to declare my income, so you’ll always get one. If you don’t want to approve invoices, you are free to choose another translator.

Do you charge PayPal payment costs?

To avoid misunderstandings, here an example. You received an invoice with a final amount of $40. When paying me using PayPal, the final amount I should receive is $40. So, you won’t receive an invoice containing extra expenses, but you’ll need anyway to pay for the PayPal transaction on your side.

I, however, will pay conversion costs from USD into EUR on my side. I think it’s pretty fair.

Do you charge wire transfer payments costs?

No. I suppose that when you are proposing me a rate, you did your math, and you’ll propose me a fair rate, considering your expenses, or choosing/preferring the less expensive payment method.

Are there extra costs for clients?

No. On the invoice there will only be the VAT entry.

Are you sustaining extra costs?

Yes:

  • I pay 6,5% of my income to my SMartbe.be accountants;
  • I got Internet, software, hardware, dictionaries, machine translation, Proz.com, office supplies, and transportation transfer costs. They are all refunded, either at the end of the year or upon invoice approval, so I don’t charge them to clients.

Are we good?

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