Community Tax Identification Number

Question

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.

Answer

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

Answer

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.

Answer

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

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