|Invoices & VAT ID|
Where do I send invoices, and how do I let google know my VAT ID?
I'm a European (outside Ireland) Adsense publisher. Judging from some research on the web, Google doesn't care about my invoices or VAT number.
However, my accountant and the taxman sure care about my sales invoices. Is there somewhere safe I can send them to Google, that Google may ignore them in peace but that I can say that I've tried?
Regarding the VAT number: Google Ireland pays VAT on my earnings to Ireland, as is usual inside the EC. However e.g. in Belgium, Google would have been required to declare purchases where it paid VAT on, with my VAT ID, so that it matches up with the declaration of my VAT-less sale to Google.
Is this not necessary in Ireland and/or does Google get a special deal, or will the taxman come after me saying I can't prove that Google paid VAT on my earnings, because since Google doesn't receive my invoices nor have my VAT number, it can't make a declaration about them.
I've been sending mine to the following address for years:
Google AdSense Payments
Never had any confirmation from them that they have received these, and when I accidentally missed a quarter I didn't get prompted to send them.
My accountant told me to print a pro forma invoice matching up to the payment notifications and (of course) using the proper information for 0% VAT notification (which means in my country that I also have to fill in a regular tax declaration showing interior community transactions and VAT numbers where I charged 0%).
NB. For my case, this isn't restricted to Google alone, although all other transactions do have correct payment notifications with both parties VAT numbers.
Note the following text available at Google Help:
"My payment address is not in Ireland
In this case, your payments are being made by Google Ireland, a company incorporated under the laws of Ireland. In accordance with the terms of your agreement with Google, the services provided are subject to the reverse charge mechanism and so VAT is to be accounted for by the recipient, Google Ireland, per Article 196 of Council Directive 2006/112/EC.
Please speak to your local tax advisors if you have further questions."
According to their information only Irish Adsense providers need to send them invoices (presumably including VAT).
Which countries are you guys in?
I'm in the UK and all I do is add the income to my self-employed earnings, this was agreed with my local Inland Revenue tax office.
My local VATman has absolutely no interest in them whatsoever.
So much for harmonisation of taxes!
I'm based in Spain, and my accountant tells me to write out an invoice but not send it.
He says I only need to send the invoice to anyone who specifically aks for it.
Interesting. No invoices required here in the US (according to my accountant) for my business.
Thanks for the interesting comments guys. Does this mean there's no practical difference between an individual and a business account, for EU businesses outside of Ireland? You can even set your business name as the Payee for accepting payments.
|No invoices required here in the US (according to my accountant) for my business. |
Let's hope it stays this way!
I am no expert and am not VAT registered but a quick scan of search results on this question suggests that the issue is not treated consistently across the EU. Advice relating to UK may not be relevant if the OP is on the European mainland.
|Does this mean there's no practical difference between an individual and a business account, for EU businesses outside of Ireland? |
I wouldn't bet on that at all, there's nothing more a bureaucrat enjoys than a different interpretation of the rules!
|You can even set your business name as the Payee for accepting payments. |
That's always been the case.
I'm in the UK and VAT registered. I can't remember whether it was my accountant or HMRC, but someone told me I had to post Google paper invoices. I was also told that the invoices have to clearly state "VAT is payable based upon the reverse charge mechanism by the recipient of the service".
From what I can tell, it is possible that the VAT people care about this, although Google doesn't.
It's a VAT only issue, so if you are not VAT registered you don't need to worry about such things.
I'm UK VAT registered and the VATman wasn't bothered however the taxman at Inland Revenue, understandably, was.
I'm keeping my head down:-)
Vibrant send me a self-billing invoice each month which I have always assumed is the equivalent of me invoicing them. It covers VAT as well. They are UK based.
Maybe Adsense should do the same for UK based publishers.
If I understand you correctly you are located in Belgium, as I am :-). VAT is a subject that can give you headaches, right? I'm also in the process of starting my internet business with AdSense.
As I understand it, you must create an invoice but don't need to send it. Sending the invoice only serves you to get paid from your customer (Google) but you are already getting paid even without sending the invoice. It works a little bit backward with Google :-).
If Google can't show your invoice to their tax authorities it's their problem, not yours as I understand it. You created an invoice and got paid for it, your tax man doesn't care if you really sent it or not.
In regard of the VAT, there's several things:
* The business operations are services you provide to Google
* The business operations are between two different countries in the EU
* The environment is a business to business, your business and Google's
* In that case, the customer (Google) is responsible for paying VAT in its country, if VAT applies on the business operation between Google and you.
VAT applies to the business operation, except if you (the publisher) are running VAT with the franchise system for small businesses.
VAT with the franchise system for small businesses is a simplified system a small business can run under in Belgium if the yearly turnover is less than 5580€/year. In that case VAT formalities are simplified but you can't apply VAT on your sales and services and can't deduct VAT from your purchases. If you are starting out with AdSense and only have low income, you would most likely be running under that VAT system.
Phew that was a long first post. Hope this is understandable and helps...
I'm located in Belgium as well, my accountant has no issue with me not sending them invoices. I think he books it as a commission.
Since your "customer" (Google) is located outside Belgium (Ireland), you do not have to collect VAT from them (neither do you have to give it to our government).
VAT between businesses is supposed to be a nul operation: you collect it from your customers on behalf of the government (when appropriate) and give it to the government - it's never yours... The exceptions (numerous as they are in a country with the 4th highest taxes in the world) are all related to how you can deduct VAT you paid to your suppliers from the VAT you have to pass on to the government.
All I do is print the monthly reports (showing the day by day estimated revenue) as well as the monthly statement from Google (under Payment history > previous payments > details > statement of earnings), and give that to our accountant.
The details are enough to justify it all. The statement of earnings gives the details on who your customer is, the amount etc - including the IE VAT ID-. It lacks the "details" required on invoices out here, but the report covers that in more detail that they'll care to review.
There's also once their reference to the EU directive that's printed and stored should the Belgian government get worried about that (they won't they know Google will just recuperate it should they force us to charge it).
There is a big difference: if you collect the money in a business you're safe and legal. If you collect it privately, you need to do a lot more to make it legal: it's now undeclared income till you declare it (and hence pay income taxes on it) - and both Google as well as your bank might well be required by law to blow the whistle on you.
|Does this mean there's no practical difference between an individual and a business account, |
Undeclared income might cost you a lot if you're not self-employed: if you have too much of it they hit you a dozen times with fines (first a fine for not being self employed while you should be, then one for not declaring income as self-employed, then one for not paying taxes being self employed, for not paying social security, ... and on and on. It's risky to not be self-employed (at least after hours) and have income that you cannot predict how much it'll be in a year.
Thanks guys, great explenations. I appreciate your help!
I guess I've been doing everything right then anyway. Sometimes it's pretty annoying to have such an unresponsive, uncommunicative "business partner" as Google.