Community Tax Identification Number

Question posted by Judi Heppell

I am a freelance translator based in UK. My clients are in Spain. They require that I have a "Community Tax Identification Number". I do not earn enough to register for UK VAT.What is this number they want and where do I get it from? It is to make all tax and VAT dealings within the EU more transparent and accessible but it is only hindering me as I cannot get this number from anyone here in UK and I will therefore lose all Spanish clients any my livelihood. So far I have spoken to HMRC, British Chamber of Commerce, HMRC VAT,
local chamber of commerce, Trade and Industry,Trade and Investment, etc. It is startling and scary that no-one can explain what this is. Thanks for any help or advice you can give me.

Posted:
Report inappropriate content

Hello Judi,
I only know of three types of number that they might mean:
1. VAT registration - your VAT number. If you are not VAT registered then you don't have one.
2. EORI - this is a customs registration number - you can apply for one of these from customs see this link for info http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&id=HMCE_PROD1_028598&propertyType=document#P14_1876

3. Your national insurance number

I would suggest that your clients are looking for the EORI number. You can have one of these even though you are not VAT registered. You would apply as a non VAT registered individual. This number is often used for people who are moving goods around but it is a customs registration number that is understood all over the EU and would officially identify you as the trader which is probably what your clients want.

There is no cost involved in getting an EORI number from HMRC and it takes around 3 working days if all the details on the application form are correct.

I would recommend getting an EORI and then give this number to your clients.

Regards,
Susan

Posted:
Report inappropriate content

Hi Susan,
Thank you so much for your answer! I have googled this EORI number and found the following:
“You need an EORI number if you are required to provide pre-arrival/pre-departure information for goods or are involved in the import, export or movement of goods under a transit procedure”.
I am not exactly sure that DIGITALLY-DELIVERED TRANSLATION would fall into this category. HMRC told me to look at this page: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document#P1027_129359
Here it states:
VAT on services provided in or to Spain (which is the only number they could think of)
“Everything else is covered by a general rule. This includes copyright, royalties, licences, other intellectual rights, advertising, consultants, engineers, lawyers, accountants, data processing, written translation, computer programming, software maintenance, web design, sound engineers and technicians, the supply of staff, banking and insurance.”

“Under the general rule, if the service is being supplied to a business customer in Spain, it will be within the scope of Spanish VAT (UK VAT is not charged).“
- and I am not VAT registered.
“Most services are then covered by the Spanish reverse-charge procedure. This means that the Spanish customer has the responsibility for dealing with most of the VAT issues.”

So as I understand it, I don’t have to charge VAT and the Spanish customer has to sort out VAT at their end using the reverse charge mechanism.

I will apply for this EORI number on Monday and also give my clients my NI number.

I am truly saddened and frightened to see that where the EU is supposed to have made trade between countries seamless and easy it has failed hugely if I can’t supply this “Community Tax Identification Number” (to the extent of potentially taking my livelihood away from me).
Once again, thank you very much, Susan.

Posted:
Report inappropriate content

Hello Judi,
I am sorry you are disappointed with the EU. Unfortunately the popular conception of what the EU is and what it actually is are very different. The creation of the EU did remove some of the bureaucracy and in particular it removed import duty between member states but it most certainly did not become seamless and free of bureaucracy.

I would recommend that you do not confuse your client by giving him your NI number and an EORI. Wait for your EORI and give that to him. You need to know that whilst EU member states agree certain rules each country can add to those rules and maybe in Spain the EORI is always needed for cross border trade or maybe your client has an accounting system that requires a number.

I also need to mention to you that the translation services you are providing could also be subject to export licensing law. I am sure you would think twice if someone asked you to translate a manual called 'how to build a better bomb' but it is more subtle than that. For example a computer could be used in the home but it could also be used by a military establishment or a terrorist. (dual use goods). You are required to think about this and to seek guidance if you have any doubts about the content of the things you are translating or the customer who has asked you to do it. This may seem far fetched but terrorists are devious! Take a look at the licensing of intangibles at https://www.gov.uk/government/organisations/export-control-organisation

Don't be frightened by international trade - it is a great opportunity. But do find out what rules you need to follow. If you have any further questions don't hesitate to ask.
Regards,
Susan

Posted:
Report inappropriate content

Peter Curnow-Ford, on behalf of Viatec Associates Ltd in WC1N.

Hi Judy,

Please follow this link to a Spanish site which explains what 'Spain' understands to be a Community Tax Identification Number:

http://www.agenciatributaria.es/AEAT.internet/en_gb/Inicio_en_GB/_Segmentos_/Empresas_y_profesionales/Empresarios_individuales_y_profesionales/IVA/El_NIF_en_el_IVA.shtml

it has a good explanation of their thinking and explains that if you are not a Spanish National you need to download a form (easier than going to a Spanish Post Office) and complete, links are given.

Peter

Posted:
Report inappropriate content

Nicola Bridgett, on behalf of UKTI London in SE1.

Hello Judi,
The Community Tax Identification Number they want is your UK VAT number. This is so they can prove zero-rating of the purchase. It is perfectly legitimate for you to tell them that you are not registered for VAT here in the UK and therefore don't have a VAT number for them. They CAN still trade with you. The problem is that many companies see the VAT number of their suppliers as an indication of validity/credibility and will not trade with a company which cannot give them a VAT reference number. I advise that you speak to your clients and explain this and ask them what information you can supply which would give them the confidence to trade with you. It may be that an EORI number is adequate. Failing this you may wish to consider voluntarily registering for VAT in the UK so you can give them a number. Nicola

Posted:
Report inappropriate content

Hello Peter,
Thanks for answering. I find the page very hard to understand, but especially worrying that I may need to register with the Spanish Tax authorities, a country that has absolutely nothing to do with where I pay my taxes. Also I have looked at the forms and to get started I have to a) fill in my Spanish Tax ID number (that I obviously don´t possess) and b) it has to be physically handed in to a Spanish tax office.
And thank you Nicola. My problem is as I work with such small companies in UK they cannot afford to pay me VAT, so I would lose those customers if I registered for VAT - and I would also have to pay more to an accountant to sort out my tax returns.
And finally, thanks again to Susan. As a professional translator if I am not comfortable with the text offered to me - ie if it is not my specialism - I would never attempt to translate it, as any translator will tell you!
Thanks very much for all your help.
Judi

Posted:
Report inappropriate content

To respond to this question, please Login or Register