This is even more true as it is logical: why would we, as language experts, not rely on other experts when we only can do more or less a "DIY-job" in their area of specialism?

Laurent K.

This is yet another reason why I prefer working for publishers in my own country. It`s the publisher that makes the takeout from the total to be paid, and what I get is my fee less taxes. That is a standard contract clause.

My wife is trained in bookkeeping and did my books for me.  However, when I own a multi-million pound consulting service I will get a pro in to do them.  My sister-in-law is also an accountant so nepotism might raise its cheaper head. 

Hi, Genevieve,

Originally written by Genevieve Shaw on February 12, 2009 8:58 AM As I am in Spain, we have to do quarterly, rather than only annual, tax declarations.  So, it gets a little complicated. Actually, I think it is quite unfair that in the UK, freelancers are exempt from paying VAT if they earn less than 50.000 pounds. Should this not be homogenized as an EU thing?

One of the major problems with being a freelancer in Spain is not so much the quarterly VAT declaration, as much as the lack of a "buffer" for freelancers - as soon as you're registered as a freelancer, you start paying your Social Security quotas in full, whether your income is 3000 € a month or nothing. I like what you mention about the British system.

So what actually happens here is that a lot of people start working, invoice clients without VAT, and wait to get enough traction to actually be able to cover the monthly fee. I find it a very stupid way to create a submerged economy.

But overall, yes, your accountant is "competitive" (I was going to say "cheap" but it didn't sound right). It's not a question of software, even of time, it's more to do with expert knowledge. These people can be very helpful in this sense, so I cannot recommend it enough.

Best,

Kamen

Originally written by Kamen Nedev on February 14, 2009 6:29 PM     One of the major problems with being a freelancer in Spain is not so much the quarterly VAT declaration, as much as the lack of a "buffer" for freelancers - as soon as you're registered as a freelancer, you start paying your Social Security quotas in full, whether your income is 3000 € a month or nothing. I like what you mention about the British system. Best,  Kamen

Same in France, Kamen - and far from being likely to be changed by any present or future government!  By default, ordinary citizens and freelancers are considered being potential or even actual fraudsters.  The fiscal services obviously work on "hunting/shooting premiums".

Laurent K.

Maybe in countries like Spain, the translators should unite into some kind of cooperation. Then the translators personally only would have to declare income taxes and the cooperation would declare the VAT taxes. This could also be a non profit entity, only serving to share administrative costs for this particular group.

Maybe it already exists.... call an accountant near you house and check it out.

You could always emigrate to Mexico... here we only charge 15% VAT and deduct it all beautifully with all the expenses you make, books, dictionaries, Trados, laptop... so you don´t really have to pay a lot... and the same expenses can be deducted from your income tax... really... come to beautiful Mexico you could almost say it´s become a tax paradise...

good luck

Ronald

(now translator, formerly known as accountant)

Originally written by Ronald van der Linden on March 19, 2009 7:07 AM here we only charge 15% VAT and deduct it all beautifully

While deductible costs are crucial to obtain profit, I don't understand the point you are making about the VAT, Ronald. Since it is a tax you add to your fees, it does not affect your result at all. So, apart from the bookkeeping burden, it really shouldn't matter whether the VAT is 15% as in Spain or 22% as in Poland as long as your customers pay it with your invoices (and offset it themselves) at which point you simply forward it to the tax office without having to think about how to offset it. What you do have to worry about, of course, is not the VAT but your income tax which you want to keep as low as possible by deducting as much as possible from your revenue.

Jacek

Hello everybody,

I would like to hire a tax advisor in order to sleep better, like Genevieve said. But I would need to be sure he is really good and not too expensive:

As we moved from Germany to Spain, I hired the services of a tax adviser to register at Hacienda, the social security etc, to be sure everything would be all right.

He was much more expensive than yours, Genevieve, and unfortunately, he made 3 monumental errors at the beginning which we had to correct afterwards. So we decided, with the help of a colleague and from the people from Hacienda as well, to do this work by ourselves - until now.

(In Germany, we did it by ourselves also, asking the Finanzamt everytime it was necesssary, sometimes expecting days in order to get the right (?) answer. Of course, our declaration is not that complicated, we do not have children for ex. and translation is my only commercial activity).

Chani

Originally written by Jacek K. on March 19, 2009 2:27 AM Originally written by Ronald van der Linden on March 19, 2009 7:07 AM here we only charge 15% VAT and deduct it all beautifully While deductible costs are crucial to obtain profit, I don't understand the point you are making about the VAT, Ronald. Since it is a tax you add to your fees, it does not affect your result at all. So, apart from the bookkeeping burden, it really shouldn't matter whether the VAT is 15% as in Spain or 22% as in Poland as long as your customers pay it with your invoices (and offset it themselves) at which point you simply forward it to the tax office without having to think about how to offset it. What you do have to worry about, of course, is not the VAT but your income tax which you want to keep as low as possible by deducting as much as possible from your revenue. Jacek

In general VAT is an outgoing cash flow, you would like to have this outgoing cash flow a low as possible. It does not affect results. But it ofcourse affects cash flows (investment etc) The problem with VAT is that, e.g. if I work for a Spanish client, he cannot deduct Mexican VAT, then translators and clients decide on an all-in tariff. Meaning the USD .10 then includes the VAT.

Originally written by Ronald van der Linden on March 19, 2009 5:12 PM ...then translators and clients decide on an all-in tariff. Meaning the USD .10 then includes the VAT.

Oh no, we certainly don't want that! Thanks for this clarification. (As a side note, sworn translators in Poland, when working domestically for the government, have been going through that for a few years now and it is only this year that the relevant law fixing their VAT problem will go into effect.)

Jacek