Contract with a european producer, should the invoice include VAT ?
Tuesday, 13 January 2009
“Do we need to pay VAT on a transfer contract entered into with a Belgian producer for a show that will be performed in France? On the basis of article 9-2.c of the 6th European directive, transposed in Belgium by article 21-3-4a of the VAT code, the producer in question says there is no VAT”
In your case, VAT is payable in France, at the same rate as that for a transfer contract entered into with a French producer, but it is not “invoiced” by your Belgian partner.
A foreign-based company supplying all or part of a show performed in France is liable for VAT at the applicable French rate. However, since 1 September 2006, VAT is “reverse-charged” by the French client if he has a VAT number.
This reverse-charging mechanism requires you to state the total amount of the transaction exclusive of VAT in your VAT return (3310-CA3 or 3517) on the line headed “Purchases of goods or services from a taxpayer not based in France (article 283-1 of the [French] general tax code)” .
The VAT you thus declare is then deductible according to standard practice, provided the Belgian producer’s invoice:
- clearly states that you are liable for VAT;
- and quotes the provisions of the 6th VAT directive (article 21-1-a) or the [French] general tax code (article 283-1).
Just including a reference to article 9-2.c of the 6th directive does not in itself suffice.
Nb > Moreover, the said article stipulates that services in connection with cultural, artistic activities (etc.), including “those of organizers of such activities […] are taxed in the country where the said services are effectively performed”.
