VAT tax rules for German picture sales

I sorta helped a friend sell his pic on a German mag in exchange for dinner at my fave restaurant. He told me today that magazine charged him VAT on payment to his bank account, which to me is unheard of. I thought German VAT rules for non-resident (German or EU) was that the payer (service purchaser) has the burden of VAT tax and not the payee (service provider)?

Anyone have anyone experience with picture sales in Germany? This is a really good dinner I'm about to lose!

I sorta helped a friend sell his pic on a German mag in exchange for dinner at my fave restaurant. He told me today that magazine charged him VAT on payment to his bank account, which to me is unheard of. I thought German VAT rules for non-resident (German or EU) was that the payer (service purchaser) has the burden of VAT tax and not the payee (service provider)?

Anyone have anyone experience with picture sales in Germany? This is a really good dinner I'm about to lose!

How much is a hotdog where you live?

I told the biggest German magazine to stop using my pictures because my bank was charging me more to process their cheques than the money they were paying me was worth!

How much is a hotdog where you live?

 

I told the biggest German magazine to stop using my pictures because my bank was charging me more to process their cheques than the money they were paying me was worth!

you do make me laugh John.

Thanks John... really helpful that was. Veggie hotdogs are actually half good.

Thanks John... really helpful that was. Veggie hotdogs are actually half good.

Your mother must have slipped you some good animal protein once to grow those long legs!

Thanks John... really helpful that was. Veggie hotdogs are actually half good.

As I understand it, supplies of goods or services made by those outside the EU do not attract VAT just as the fees for my contributions to Undercurrent are not charged with VAT added. It's more like VAT on the charge the bank makes to do the transfer. (As I experienced.)

However, I am not a tax expert and have just written to HMRC (our internal revenue service) to ask them what interest rate they charge that makes an interest charge of £3.15 on £0.00 owing for two months. In my day any percentage of zero was zero but obviously that's changed.

As I understand it, supplies of goods or services made by those outside the EU do not attract VAT just as the fees for my contributions to Undercurrent are not charged with VAT added. It's more like VAT on the charge the bank makes to do the transfer. (As I experienced.)

 

However, I am not a tax expert and have just written to HMRC (our internal revenue service) to ask them what interest rate they charge that makes an interest charge of £3.15 on £0.00 owing for two months. In my day any percentage of zero was zero but obviously that's changed.

Probably Nancy Pelosi working there!

As I understand it, supplies of goods or services made by those outside the EU do not attract VAT just as the fees for my contributions to Undercurrent are not charged with VAT added. It's more like VAT on the charge the bank makes to do the transfer. (As I experienced.)

 

However, I am not a tax expert and have just written to HMRC (our internal revenue service) to ask them what interest rate they charge that makes an interest charge of £3.15 on £0.00 owing for two months. In my day any percentage of zero was zero but obviously that's changed.

Thanks John, I knew you weren't just another pretty face.

I think you are right about the bank's VAT. I just checked and they charged 8% VAT, not the usual 19% VAT.

As for your interest charge, it's actually a charge for you NOT having any balance at all. You must owe money to lubricate the economy so they say. Hey wait, isn't that why we are in this mess in the first place?

Hi,

I am from Germany. I checked this in a forum. I understand it like this: you don't have to pay VAT. If you paid, there should be some kind of reimburstment. Don't ask me from where :-) The buyer (magazine) has to pay the VAT, normally 19%, in Germany. If they charged you this I would contact them again ask them how to pay the VAT. It should be possible for them to pay that locally and book it their accounting software.

To my opinion it is wrong to charge the VAT to your friends bank account.

I am from Germany. I checked this in a forum. I understand it like this: you don't have to pay VAT. If you paid, there should be some kind of reimburstment. Don't ask me from where

Probably you can show your VAT payment receipt at the airport or any border if / when you are passing through (on your way to dinner) and get reimbursement just like tourists do when they purchase things in Europe.

I sorta helped a friend sell his pic on a German mag in exchange for dinner at my fave restaurant. He told me today that magazine charged him VAT on payment to his bank account, which to me is unheard of. I thought German VAT rules for non-resident (German or EU) was that the payer (service purchaser) has the burden of VAT tax and not the payee (service provider)?

Anyone have anyone experience with picture sales in Germany? This is a really good dinner I'm about to lose!

Cross border VAT is my area of professional expertise so I will attempt to explain how this works. Whilst I work for the UK tax authorities, VAT is an EU wide tax based upon common principals. Therefore, the rules should be the same in all Member States.

When you sell the rights to publish a picture you are making a grant of copyright (a service) and this falls under the 1st indent of Article 56 of the EC VAT Directive. As such it is taxable where the recipient belongs. As your friend is supplying the picture to the German publisher (i.e. a German recipient), the service is subject to VAT in Germany. However, under the reverse charge provisions, the publisher should account for the VAT rather than the supplier. This is applied on top of the consideration for the supply (i.e. if he sells the right for 100 EUR and German VAT is at 21% than the VAT is 21 EUR). Now, if the publisher is self billing then the invoice he issues would show 100 EUR + 21EUR VAT. The publisher can then recover the VAT on his return. It has a nil net tax effect.

The upshot of all of this is the your friend may receive an self billed invoice showing VAT but this should not effect the amount he is actually paid for the publishing rights.

Clear? Mud?

Daniel

Thanks very much, Daniel.

Very clear indeed and no quip about my mother too. Mr Bantin, learn! Seems to me that the mag needs to shake their accounts dept. I confirmed this with a buddy who confirmed this with his DE tax auditors.