VAT number for someone who isn't a sole trader/business?

DefinitelyMarc

Hi folks,

I recently created an Android game and the company providing the augmented reality functionality needs a VAT number (for god knows what reason).

I responded to their e-mail that I'm not a company, so I don't think this applies to me. In the event that it does though, what are my options? I just need the number so that they won't pull my apps license within the next two weeks.

Any help is appreciated!

jimmii

I'd imagine the majority of apps are made by people in your position so I would expect them to be familiar with it and will just get back saying that's no problem.

pedroeibar1

Firstly, your title is misleading - If you are not invoicing through a company, or if you are not an employee, you are a sole trader. There is no need to register for VAT where your fees are below a defined annual threshold; if you are invoicing as a consultant and if the recipient of your services [is overseas] there are other implications. If this is not a one-off job I'd suggest a call to your accountant would be beneficial.

dbran

If you do not have a VAT number then presumably they are going to charge you VAT.

Dbran

DefinitelyMarc

pedroeibar1 wrote: »

Firstly, your title is misleading - If you are not invoicing through a company, or if you are not an employee, you are a sole trader. There is no need to register for VAT where your fees are below a defined annual threshold; if you are invoicing as a consultant and if the recipient of your services [is overseas] there are other implications. If this is not a one-off job I'd suggest a call to your accountant would be beneficial.

Okay, so you don't have to register to be a sole trader then, correct? Maybe I'm no being clear here, but I'm not working for anyone, I'm just using someone elses software in a product that I'm making for the Play Store (It has ads in it, but that's it). To clarify, I'm not familiar with anything on the business registration or tax side of things. I also don't have an accountant, as I've never needed one (And I'm hoping that might give you some perspective on just how new to this kind of stuff I am :pac:).

I am literally just using someone elses software to add to a game I've made that will have advertisements on it. And for that I need a VAT number.

jimmii wrote: »

I'd imagine the majority of apps are made by people in your position so I would expect them to be familiar with it and will just get back saying that's no problem.

I thought so too, but just received this:

Hello,

Let us briefly explain the situation that PTC is currently in.

As it stands PTC only sells Vuforia licenses out of PTC Inc. This is an US based company.

To avoid any VAT issues PTC Inc. can only sell to registered VAT businesses in the EU.

What does that mean?

European VAT law basically states there are 2 possible transactions: B2B (Business to Business) or B2C (Business to Consumer).

To fall under the B2B header you need to have a valid “European” VAT number i.e. you are registered for VIES/Intrastat. If you don’t have a valid “European” VAT number you are a Consumer from a VAT POV.

If PTC Inc. wants to sell to consumers it has to register in every country for VAT. In the case of yourself this would mean PTC Inc. would have to obtain an Irish VAT registration.

For obvious reasons (administration being the biggest) PTC Inc. has no intention to register and actually wants to avoids registrations. In most EU countries the threshold for registration is zero so one transaction can breached the threshold.

Therefore PTC as a company need to be prudent so when the European VIES database doesn’t provide us with confirmation PTC can’t take the risk to process the transaction.

We hope this explains our situation and do apologize for an inconvenience this might have cost you.

Kind regards,

I really wish they'd mentioned that before I started using their product...

So it seems I need a VIES/VAT number and it's "easy".

If I do this (as a sole trader), does that mean I'll have to hire an accountant to sort my taxes at the end of each year?

mrawkward

Just buy your licence using a US address, of a friend/relative.
They are wrong in their interpretation of VAT regulations for non-EU suppliers, but not worth the effort to even go there. You could even get an Irish Vat registered entity to make the transaction for you. Simples!

jimmii

Looks like they have no interest in really learning how things work over here! You do see that with US based companies when the issue of vat comes up. Vat registration is easy and your accounting needs are going to depend on the revenue you bring in. Your accounting isn't going to differ much to how you'll have to declare the additional income as it is whether or not you'll need an accountant is going to depend on how competent at things like that you are.

tringle

Don't quote me on this but
Your vat number is normally your PPS number. I wonder what they will do once they get it, are they actually going to charge you vat and if so are they going to declare that small some to either government as specifically coming from you. You could just give them your pps number...unless they specifically ask for you vat registration cert.

mrawkward

tringle wrote: »

Don't quote me on this but
Your vat number is normally your PPS number. I wonder what they will do once they get it, are they actually going to charge you vat and if so are they going to declare that small some to either government as specifically coming from you. You could just give them your pps number...unless they specifically ask for you vat registration cert.

Dumb advice, false vat number will be easily discovered with simple online registration checking tool!

jimmii

mrawkward wrote: »

Dumb advice, false vat number will be easily discovered with simple online registration checking tool!

You only went and quoted him :pac:

But yeah agree do not do what they said! They've already said they check vies so nothing but a vat number is going to satisfy them.

mrawkward

jimmii wrote: »

You only went and quoted him :pac:

But yeah agree do not do what they said! They've already said they check vies so nothing but a vat number is going to satisfy them.

Never one to obey

tringle

jimmii wrote: »

You only went and quoted him :pac:

But yeah agree do not do what they said! They've already said they check vies so nothing but a vat number is going to satisfy them.

OK , I wasn't sure if they would be checking it or just needed a number to satisfy their records which some overseas sales do.

srsly78

OP if you _really_ need this service, then register for VAT! If you don't need it then don't.

mrawkward

srsly78 wrote: »

OP if you _really_ need this service, then register for VAT! If you don't need it then don't.

Simplest solution in Post#6...no rocket science and no ongoing compliance.

pedroeibar1

OP, on your sole trader / company comment : - have a read of this post as it explains the differences.

You also stated that you have no idea of what is involved in VAT etc, so I suggest that you use an accountant because doing the finance / record keeping involved will be a disaster for you due to lack of interest and understanding. Nothing wrong with that, lots of people outsource the boring (but very important) stuff and concentrate on what they do best.

US companies in general have zero idea about working internationally. You will not change / influence their thinking, so if you want to do business it has to be done their way. While I do not fully disagree with Mr. Awkward’s post #6, I would point out at this stage that the US ‘partner’ knows you are in Ireland and will probably insist on an Irish VAT number. A short time with an accountant would put you right and in the long term would pay for itself.

mrawkward

pedroeibar1 wrote: »

OP, on your sole trader / company comment : - have a read of this post as it explains the differences.

You also stated that you have no idea of what is involved in VAT etc, so I suggest that you use an accountant because doing the finance / record keeping involved will be a disaster for you due to lack of interest and understanding. Nothing wrong with that, lots of people outsource the boring (but very important) stuff and concentrate on what they do best.

US companies in general have zero idea about working internationally. You will not change / influence their thinking, so if you want to do business it has to be done their way. While I do not fully disagree with Mr. Awkward’s post #6, I would point out at this stage that the US ‘partner’ knows you are in Ireland and will probably insist on an Irish VAT number. A short time with an accountant would put you right and in the long term would pay for itself.

Which is why I also suggested getting a VAT registered entity based in Ireland to purchase on his behalf as an alternative way to skin the cat!!

pedroeibar1

Indeed you did, but if the OP has an ongoing agreement it would be better to get a VAT no, rather than depend on a mate and the ensuing bookwork that would en-tail, hopefully skinning the cat before drowning it in cream!

mrawkward

pedroeibar1 wrote: »

Indeed you did, but if the OP has an ongoing agreement it would be better to get a VAT no, rather than depend on a mate and the ensuing bookwork that would en-tail, hopefully skinning the cat before drowning it in cream!

As ever Pedro, the devil is in the detail. However, we do not know whether it is a once off purchase, a recurring fee or even a licence by royalty.
Loose/vague info = imprecise advice

DefinitelyMarc

mrawkward wrote: »

As ever Pedro, the devil is in the detail. However, we do not know whether it is a once off purchase, a recurring fee or even a licence by royalty.
Loose/vague info = imprecise advice

It's a once-off payment of 480 euros.

mrawkward

DefinitelyMarc wrote: »

It's a once-off payment of 480 euros.

See Post#6 and pick the easiest option first. Good luck with the product and register for VAT when you are doing the volume!!

Mrs OBumble

OP, are you charging for your app? Are you getting money from the ads which are shown in the app?

If the answer to either of these is "yes" then you do need to register with Revenue as self-employed, ie for Income Tax. (You can do this as well as still being self employed and paying most of your tax thru your employer.)

You will only need to pay tax on your profits (= revenue minus allowable expenses).

But you will need to get some good advice about what counts as allowable expenses, eg how a one-off software licence of that scale is treated.