Do I need to have an invoice to deduct expenses?

TeemuThreads: 7 Posts: 24 Joined: Jul 21, 09 ♂	Jan 9, 10, 10:15 #1
Hello! Do I need to have an invoice to deduct my expenses if I pay for internet services via corporate debt card (card belongs to Sp. z o.o.)? In fact, if you buy something in the internet, you ususally don't get an invoice. Or my expenses can be accounted using debt card statement (usually it shows how much has been paid and when)?

inkrakow	Jan 9, 10, 13:12 #2
I have 2 accountants and neither will accept anything else apart from an original invoice with the company's details on it.

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Jan 9, 10, 15:23 #3

Teemu:

Do I need to have an invoice to deduct my expenses if I pay for internet services via corporate debt card (card belongs to Sp. z o.o.)? In fact, if you buy something in the internet, you ususally don't get an invoice. Or my expenses can be accounted using debt card statement (usually it shows how much has been paid and when)?

You usually do get an invoice - any reputable online supplier should be giving them. You'll have to print it yourself, but that's no issue. If you don't get an invoice, I'd be questioning what they're doing with the 22% VAT that you'll be paying.

But yes - you're just asking for trouble if you attempt to deduct something without an invoice to back it up.

TeemuThreads: 7 Posts: 24 Joined: Jul 21, 09 ♂	Jan 9, 10, 17:45 #4
delphiandomine, so I guess, signature on invoice isn't so important? And many US service suppliers don't charge VAT at all, moreover, you can pay them via paypal.

convexThreads: 46 Posts: 7,185 Joined: Nov 25, 09 ♂	Jan 9, 10, 18:10 #5
Signature isn't important, tax id on the invoice is. You shouldn't pay any kind of sales tax on a product that is delivered form the US, you'll pay VAT (and eventually claim it back) at customs. For services performed, it varies based on the state, but normally you shouldn't be charged sales tax for labor (services). You just submit your invoice to the accountant and call it a day.

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Edited by: delphiandomine Jan 9, 10, 19:59 #6

Teemu:

delphiandomine, so I guess, signature on invoice isn't so important? And many US service suppliers don't charge VAT at all, moreover, you can pay them via paypal.

They're breaking the law by not charging VAT - I can't recall the name of the EU Directive in question, but there is an obligation for non-EU sellers to register to pay EU VAT if they supply digital goods to consumers. If they don't add the VAT, then you'll have to pay it regardless - just like you would pay if you received a physical item from a non-EU country.

And no, signature/stamp on the invoice doesn't matter - unless someone can point to me otherwise, my understanding is that a printed invoice is more than enough.

Personally - I would steer clear of dealing with suppliers that can't account for EU VAT on digitally supplied goods. It's just not worth the hassle with the tax office.

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Edited by: Teemu Jan 11, 10, 01:25 #7

Here is what I've found:

EU VAT Rules for Electronically Delivered Services
when non-EU operator supplies electronic services to an EU company (not a final customer), this transaction may not be subject to VAT under the "reverse charge mechanism." Since the EU company will collect VAT when making the final product sale, the non-EU operator sale is exempted from VAT payment.

source: http://www.ibls.com/internet_law_news_portal_view.aspx?id=2121&s=lates tnews

So I guess, if a purchase is made by company for business purposes, it isn't VATable.

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Jan 11, 10, 01:47 #8

Teemu:

So I guess, if a purchase is made by company for business purposes, it isn't VATable.

Maybe it is, maybe it isn't. The one thing that you have to bear in mind here is that what might be interpreted one way in the UK can be interpreted completely differently in other countries - in the absence of any formal ruling at European level, each country is free to interpret things as they please.

VAT is a minefield, and has been subject to endless arguments in the EU legal system.

From the sounds of things, you really need to consult properly with a Polish accountant before you start a business here. Making blind assumptions based on what you hear on forums and read online is very dangerous in Poland - the tax system here is set up to thoroughly punish those that get it wrong. I heard of an example the other day where the tax office fined an individual 100% of the amount of VAT that wasn't paid (by mistake, accountant error) - along with the VAT amount due. And that was for a minor mistake that could have been rectified quickly!

Incidentally - are you a Russian national? There are some complicated laws surrounding business formation by a non-EU national - I don't have access to my lists on this computer, but I'm fairly certain that it's not so straightforward as it is for EU citizens.

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Edited by: jonni Jan 11, 10, 01:54 #9

inkrakow:

I have 2 accountants and neither will accept anything else apart from an original invoice with the company's details on it.

You should think about changing them. They work for you, not the other way round. Not all (but certainly some) accountants here know that if you present an expense without a faktura or rachunek, you can sign an oświadczenia that you haven't got a faktura. Not ideal, but certainly legal, and fine for smaller amounts.

Of course if it's an item you've bought from a foreign source, you could knock something up yourself - should you get a tax inspection there shouldn't be a problem - they're not going to challenge an invoice from another country unless they have serious grounds to be suspicious. My friend who's a tax inspector sometimes texts me to translate a word (always the name of the product or service) on a foreign invoice - he said it's only for very large invoices though, and they only officially query them if they're for some weird or wonderful item or there are a lot of them and they suspect money laundering.

If the accountant's got a pre-1989 mentality and starts to kvetch about rubber stamps, just point out correctly that not every country uses them on invoices. If she (and it's very often a she) still argues, change your accountant.

z_dariusThreads: 22 Posts: 5,091 Joined: Oct 18, 07 ♂	Jan 11, 10, 03:34 #10
Teemu: In fact, if you buy something in the internet, you ususally don't get an invoice. Strange, in the last 15 years or so I never bought anything over the Internet without an invoice.

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Edited by: Teemu Jan 11, 10, 13:49 #11

delphiandomine:

There are some complicated laws surrounding business formation by a non-EU national

Well, actually, the only difference between non-EU national and EU national (in tems of biz setup), we can't register as a sole proprietor, so we need to stick with Sp zoo or SA.

As for accountant advice vs forum advice. You know, before speaking to accountant it is good to gather info from various sources, so you'll be able to distinguish bad accountant from a good one. As you can see, there are various points of view on VAT question, so I guess, every accountant has his own point of view...and where is the truth? Only observation can tell or... tax office inspection, which isn't great at all.

z_darius:

Strange, in the last 15 years or so I never bought anything over the Internet without an invoice.

Hmmm....very often, you don't receive it, only order summary. If this will work as an invoice then great. Moreover, this is true, often you don't get an invoice, especially, when you pay via paypal.

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