Why VAT is on clients?
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 the VAT 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!
Besides 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 enslaved to 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.
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 too). I don’t moonlight or support/do black labor.
And just to be clear, I’m not trying to scam you. I got extra costs to sustain too. 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.
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 I have only 7 working days to question an invoice?
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?
Do you charge wire transfer payments costs?
Do you charge currency conversions?
Are there extra costs for clients?
No. On the invoice, there will only be the VAT entry.
Are you sustaining extra costs?
- I pay 6,5% of my income to my SMartbe.be accountants;
- I got the 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.
- 3% goes into PayPal transactions.
- 21% goes into VAT, when applicable.
- Currency conversions.
Do you use Google Translate or other tools that do not guarantee material confidentiality?
Sometimes I wonder if, just before going under a surgical operation, you’ll ask your surgeon if he will use all the tools at his disposal to save your life. Of course, he will! And so does the translator.
I know there’s a lot of misinformation regarding these tools, so I don’t want to enter the eternal dispute between human translation vs. machine translation, believe what you want, do what you like. However, all the translation engines I use are paying translation engines, because I use APIs (click here to learn what is an API). My preferred translation APIs are:
- the Google Translate API, which has a fantastic Data confidentiality clause you can read here, stating that:
«Google will not use any of your content for any purpose except to provide you with the service.»
«We will not make the content of the text that you translate available to the public, or share it with anyone else, except as necessary to provide the Translation API service. For example, sometimes we may need to use a third-party vendor to help us provide some aspect of our services, such as storage or transmission of data. We won’t share the text that you translate with any other parties, or make it public, for any other purpose.»
However, if these guarantees are not enough, you are always free to sign your DNR and ask me to NOT use these tools. Your choice, but my rates will double, nothing personal, it’s simply because my translation speed rate decreases by 50%.
Are we good?
Updated on May 10, 2017.