sole trader - commissions - tax return use case

LePrince

Hello,

I am a sole trader (legal entity is myself). I am not registered for VAT because I am under the threshold.


One of my operations is affiliate marketing: I send web traffic to a business and make commissions on sales.



One of the companies I send traffic to (based in the EU) generates an invoice on my behalf for the amount of commissions they pay me. I noticed at the bottom of their invoices there's a mention "reverse charge according to article 44 of the vat directive 2008/8/ec".


Can someone tell me how that translates in terms of tax return given the above parameters and my situation?


- For the sake of simplicity, let's consider this scenario: if the invoice shows 100 euros, do i just declare 100 EUR as income or is there some vat calculations that need to be taken into account? What is the breakdown?



As a follow up question, there is a company based in the US I do similar business with. I don't see a mention of the article 44. Same question as above with 100 USD.


And finally, same question with a UK company: 100 GBP (no mention of 44)


If someone knows about accounting and can answer my questions that would be fantastic!

Calahonda52

For EU related work
See this link
https://www.revenue.ie/en/vat/what-is-vat/what-is-reverse-charge-and-self-accounting.aspx
and follow the different threads within.

In simple terms for your VAT 3 return
look at the math here
https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/acquisitions-from-other-eu-member-states/self-accounting-for-vat.aspx

As of today, the US is not in the EU so article 44 does not apply, but I don't what the VAT tax treatment is, if any?

Re the UK, I don't know what is the case now but in 2021 they will be outside the article 44

LePrince

For EU related use cases:




"Reverse charge mechanism means one of two things:



1) You are VAT registered
you charge yourself VAT and claim it back at the same time. You're charging output VAT to yourself, and claiming back input VAT. It's zero-rated. Nothing to pay. You're only recording on your VAT return which is going to be adding to the box for vatable sales and adding to the box for vatable purchases at your country's main rate.



2) You are NOT VAT registered
you do nothing. Place of supply rules. You are a business, but not VAT registered, which means you are responsible for dealing with the VAT in your country. However, you are not VAT registered, so you cannot charge anyone VAT, including yourself but this increases your sales for the VAT registration threshold"

Keith1111

If you get paid from affiliate links how do you declare your earnings was thinking about starting this