EU Sole Trader Working in Ireland and Invoicing and Irish Company

Noroline

hi all,

just looking for some advice on the above?

the title says it all,

if someone is resident and a citizen of another eu country, and are operating as a sole trader in that country, what do they need if they are coming over and back to Ireland indefinitely to work and how should they invoice the irish company that they are working for? and do they need to register and charge VAT, etc.

Citrus_8

https://www.boards.ie/discussion/2058237672/eu-sole-trader-working-in-ireland-and-invoicing-and-irish-company

Depends on the nature of business and how many clients they have. If they work to only one company the usual full time or part time hours (either from home, traveling or in office) and has either a permanent or temporary contract based on PAYE, then it's not a sole trading business, but rather just an employee in the company (not their own). 

If they do a contract or project based job and have more than one client, than it's clearly their own business. Differences sole trader vs Ltd are well explained here: https://accountantonline.ie/guides/sole-trader-limited-company/#:~:text=Main%20differences%20between%20Sole%20Trader%20and%20Limited%20Company&text=As%20a%20Sole%20Trader%2C%20you,appoint%20yourself%20as%20a%20director.

VAT is on Revenue website: https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/what-are-the-vat-thresholds.aspx

Noroline

In this case, the person has a 1yr fixed term contract and is due to be paid based on an daily rate for his services. Does that help in terms of a steer here?

Citrus_8

https://www.boards.ie/discussion/comment/118800467#Comment_118800467

A person need to register as a sole trader with Irish Revenue. It can be done online on the Revenue website (need to login), assuming the person has access and a PPS number. Otherwise, a PPS needs to be sorted first. It should be straight forward and quick if already have a PPS.

https://www.revenue.ie/en/starting-a-business/registering-for-tax/how-to-register-for-tax-as-a-sole-trader.aspx

Then I recommend opening a separate bank account for sole trader's business. I don't recommend Bank of Ireland or Permanent TSB - they are slow, clumsy and old school. A real pain to use. But if just for a few transactions a month and if they offer a cheap plan, then maybe it's ok. Ulster Bank online account for business is the best, but they're leaving so maybe AIB is the second best option.

However, it's not mandatory as their personal bank account can be used for that too. But a separate account makes bookkeeping simplier as there's no mix of personal and business expenses. Regarding registering for VAT it depends on the income (total 12 rolling month period invoice amount). VAT thresholds are in the above Revenue link.

ShelbyInc

Are you registered for VAT in your country of residence? If so, and assuming you are not providing a service from a 'fixed establishment' in Ireland, then normal VAT rules apply. Usually, in a business to business scenario the place of supply is where the customer is located i.e. Ireland, they'd issue you with their VAT number, you'd then invoice them stating the reverse charge applies charging no VAT and the customer would self-account for the VAT.

If not, you'd be classed as a foreign trader, the threshold for VAT registration in Ireland as a foreign trader is €0.

Are you carrying out all or part of your business activities in Ireland through a permanent establishment? If so, Ireland will have taxing rights over the income that you generate through that permanent establishment. See article 5 and 7 of OECD model tax convention 2017.