Eu Compatible Billing ?

[richardh]

Hello,

 

I've just installed a 30 day blesta trial and I havn't found out how to setup EU compliant invoicing.

 

With our current system we only create an invoice when the customer has paid or when we are sure the customer will pay.

 

Mot US systems seem to create an invoice to tell the customer they have to renew. However in europe it can not work like this, as invoices numbers have to follow and every invoice you create to have to pay the amount of VAT to the government at the end of the year unless you generate a refund.

 

EU customers are not used to this system and need to just recieve an e-mail asking them to renew and have the option to renew their plans from within the client interface too.

 

In europe an invoice means a third party owes you money and our customers can decide to not renew if they don't want to by just not paying for their renewal.

 

We would need to not have an invoice created when a customer should renew but an Order and our staff have the option to transform it to an invoice with a sequential numbering system for invoices alone even if they are not paid.

 

Is this possible with blesta ? Or sould we continue developping our own system ?

 

Thanks

[Max]

I am Dutch and in the netherlands (part of the EU) we follow what you call the American system.

Invoices, especially the invoice numbering, should be continuous indeed but when an invoice is created it should be paid, 

but when a automatically renewed product wasn't cancelled it should be paid also.

 

When an invoice hasn't been paid because, for example the company cancels the products anyway or a business goes out of business you simply discard the amount on the invoice and book it on a different financial card. 

 

I also like to comment on comment #21

In the Netherlands you only enter a mutation in your financial books when a payment has been made.

For example,

when when you send an invoice on march 20th and the customer pays the invoice on 10th of April the vat of that invoice isn't due in the first quarter, because at that time the customer didn't pay the vat to you yet. The vat has to be paid at the end of the 2nd term. 

 

Do you own a hosting company?

If so, you have been terribly misinformed.

 

Hosting companies and other businesses that sell services to other companies must use accrual accounting (Dutch: factuurstelsel) and are liable for VAT the moment you write out an invoice.

 

See: http://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/btw_aangifte_doen_en_betalen/bereken_het_bedrag/hoe_berekent_u_het_btw_bedrag/factuurstelsel

 

U berekent de btw op basis van de facturen die u hebt verstuurd in het tijdvak waarover u aangifte doet. De datum van de factuur bepaalt in welk tijdvak u de btw moet aangeven.

 

 

 

Only companies that are known to sell predominantly to consumers and therefore write out a very little number of invoices are allowed to use cash accounting (Dutch: kasstelsel) instead.

Retail shops, hair dressers, market stands selling vegetables, etc.

[Dominick]

Do you own a hosting company?

If so, you have been terribly misinformed.

 

Hosting companies and other businesses that sell services to other companies must use accrual accounting (Dutch: factuurstelsel) and are liable for VAT the moment you write out an invoice.

 

See: http://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/btw_aangifte_doen_en_betalen/bereken_het_bedrag/hoe_berekent_u_het_btw_bedrag/factuurstelsel

 

 

 

 

Only companies that are known to sell predominantly to consumers and therefore write out a very little number of invoices are allowed to use cash accounting (Dutch: kasstelsel) instead.

Retail shops, hair dressers, market stands selling vegetables, etc.

 

I do own a hosting company and my expensive accountant says he knows the law,

The several years i;ve been using his services I never found a reason to doubt him.

But where am I wrong according to you?

 

Ofcourse I am required to sent out invoices and I do but that doesn't mean I can't mark an invoice as invalid, 

Our company sell's hosting but also tangible products, according to dutch (and international) law products can be returned within 14 or 30 days,

But and invoice is sent out at the moment a tangible product is purchased, so does that mean that returned products should be paid for? no,

the company simply marks the invoice as invalid or create a credit invoice (in dutch: je kan ten factuur boeken op je grootboek Niet Inbaar of je maakt een creditnota aan.) 

 

The structure Blesta uses is: services will be renewed unless the service is cancelled. When the service is cancelled after the invoice is sent and you accept the cancellation (some companies do, some companies don't) you simply invalidate the invoice (and create a credit invoice) like you invalidate an invoice when a tangible product has been returned. 

[Dominick]

I found this for the UK :

 

http://www.hmrc.gov.uk/vat/managing/charging/vat-invoices.htm

 

 

 

If I understand this correctly in the UK you also have to have invoices with numbers that follow and you have to keep all invoices for VAT inspection, meaning that you should keep all invoices even unpaid ones.

 

The only difference here is that you can cancel an invoice whereas in France you can't cancel an invoice you have to create a credit to cancel an invoice.

 

In the Netherlands we can do both. Or create a credit invoice which is normally the way to go when a client isnt paying or mark it as 'not paid', this last option is the way to go when a company goes out of business because than you will have some leverage when a curator is hired. 

[Max]

Our company sell's hosting but also tangible products

 

Then you are not purely a hosting company.

Different situation.

 

Again: if you are a retail store (or some other profession on this list: http://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/btw_aangifte_doen_en_betalen/bereken_het_bedrag/hoe_berekent_u_het_btw_bedrag/kasstelsel/voor_wie_geldt_het_kasstelsel ) you may use cash accounting.

However if you only sell hosting or other services that are primarily sold to businesses you must use accrual accounting.

There is an option to ask your tax office for permission to be allowed to use cash accounting as well even if you are a company that normally does not qualify, but that requires submitting proof that over 80% of your turnover comes from consumers and not from businesses.

That is not very likely in this industry.

 

 

 

 

But and invoice is sent out at the moment a tangible product is purchased, so does that mean that returned products should be paid for? no, the company simply marks the invoice as invalid or create a credit invoice (in dutch: je kan ten factuur boeken op je grootboek Niet Inbaar of je maakt een creditnota aan.)

 

Companies that use accrual accounting write out credit notes for returns.

 

Writing off an invoice (oninbaar) is not meant to be used for returns, but for services not paid.

If you do that -and are a company using accrual accounting- you are supposed to submit documentary evidence showing that you did a serious attempt to collect the debt, but failed, in order to get the VAT already paid back.

See: http://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/btw_aangifte_doen_en_betalen/aangifte_corrigeren/btw_terugvragen/teruggaaf_vanwege_oninbare_vorderingen

 

In practice many companies therefore use credit notes as well to correct small invoices they do not bother chasing.

Less paperwork for that.

[Dominick]

Then you are not purely a hosting company.

Different situation.

It maybe a different situation in your eyes but when it comes down to Tax it's all the same.

 

But,

When we read this thread we thought we shared our findings because when we started out we had questions how to do certain actions especially in the important area's like bookkeeping,

Our company has been around for several years and thought to share the findings of our accountant.

But it's clear to us that mindset in this thread isnt as open as we originally thought.

 

So we decided to leave this conversation and wish all the best of luck,

Two notes:

1. If anyone who reads this is located in the Netherlands and needs some help on this end, feel free to send us a pm.

2. @blesta - The current system works fine for Dutch users so there is no need to change it.

[Max]

It maybe a different situation in your eyes but when it comes down to Tax it's all the same.

 

My reply contained a link to the official website of the Dutch tax authority, listing the type of companies that are allowed to use cash accounting in the Netherlands.

Are you suggesting that information is incorrect?

 

 

 

But it's clear to us that mindset in this thread isnt as open as we originally thought.

 

 

I am open to arguments.

But prefer a link to something official, rather than just that your accountant told you.

What he says may very well be correct, but is advice specific to your company.

And unlike you, I do think it is a very big difference if you are seen as a retailer (webshop shipping tangible goods) that also does a little hosting, or as a hosting company.

[hpno]

However, if I am correctly, even Blesta is not able to setup different VAT percentages for different products. When setting up a product, it has option for taxable or not only.

 

Many interesting questions in this thread, Blesta is new to us but it seem to be a good road for us to go. We have tried to use most of the leading solutions for selling domains, hosting etc. (IT business) but there always been some  disadvantages, they' have all forced us with a lot of double bookkeeping to get things going without compromising the law etc.
The reason we need VAT per product is that in a country like Norway where our business reside, we have different VAT percentages on different products and some products are even free of taxes (books and some consultancy services depending on residence of the client) are good examples.

I also believe that standards of bookkeping in Norway is very similar to the rest of Europe despite the fact Norway isn't a member of the EU.

[PauloV]

However, if I am correctly, even Blesta is not able to setup different VAT percentages for different products. When setting up a product, it has option for taxable or not only.

 

Yes, for, now that we know it there isnt any Hosting Buisness Software capable of dowing multiple VAT per product/service. It only have the option to tax, or not tax a product/service

 

Its not mandatory, because in our buisness we have hosting/internet products and services, and it only requires one VAT Tax for it.

 

On your buisness how many Tax Vat's do you need?

[Blesta Addons]

However, if I am correctly, even Blesta is not able to setup different VAT percentages for different products. When setting up a product, it has option for taxable or not only.

you can do this with this tip ;

disable tax completly in blesta .

add price including tax for every product/service .

and a note in your site , all price tax included .

[Dominick]

My reply contained a link to the official website of the Dutch tax authority, listing the type of companies that are allowed to use cash accounting in the Netherlands.

Are you suggesting that information is incorrect?

 

 

 

 

 

I am open to arguments.

But prefer a link to something official, rather than just that your accountant told you.

What he says may very well be correct, but is advice specific to your company.

And unlike you, I do think it is a very big difference if you are seen as a retailer (webshop shipping tangible goods) that also does a little hosting, or as a hosting company.

 

I can give you a link to the website of a local car dealer and I am sure the information on there is correct, but it has nothing to do with invoicing for 99% of the companies. 

 

And unlike you, I do think it is a very big difference if you are seen as a retailer (webshop shipping tangible goods) that also does a little hosting, or as a hosting company.

 

I think this is the issue with your replies, Dutch law doesnt even recognize Digital products. The dutch tax office doesnt care if you sell hosting (digital services) or servers (tangible products) only the Dutch Chambre of Commerce cares. For the tax office it's all the same: Money. 

[Max]

I think this is the issue with your replies, Dutch law doesnt even recognize Digital products.  The dutch tax office doesnt care if you sell hosting (digital services) or servers (tangible products) only the Dutch Chambre of Commerce cares.

 

 

Dutch law makes a difference between retailers (and a couple other company types) which as a special exception are only liable for taxes over the amount actually paid, and everyone else that has to use accrual accounting.

Is your reasoning that because the law doesn't recognize digital products, it could be argued that a web hoster is simply a retailer selling digital products and therefore qualifies?

If so, that is the point we disagree on. I don't see hosting as a retail activity, nor do I agree with your statement that 99% of the companies fall under an exception.

 

If you want the actual law articles, rather than the summary on the website linked earlier.

See art. 13 Wet op de omzetbelasting 1968 for the normal situation. (accrual accounting, tax liability on the date an invoice is written out)

art. 26 Wet op de omzetbelasting 1968 for the exception (tax liability the moment payment is received if you qualify)

art. 26 Uitvoeringsbeschikking omzetbelasting 1968 for the exact list of companies qualifying for the exception.

 

And do note that the tax office asks you to describe your company's activities every year on your IB/VPB tax return. Certainly not only the company register (chambre of commerce) that wants to know, and would be careful what you (or your accountant) put there.