We talk about chargebacks when you, as a business, advance expenses on behalf of a client and then charge them back to the client.
These costs may include expenses such as travel, accommodation, or food costs that you incurred in carrying out an assignment or project for your client.
When re-invoicing expenses, you must comply with the invoicing rules ! For example, if you are subject to VAT, you must add your intra-community VAT number to all of your invoices.
Should VAT charges be re-invoiced?
The possibility of deducting VAT depends on the nature of the expenses incurred.
For example, Article 206 of Annex II to the CGI provides that passenger new zealand email list transport (taxi, plane or train costs) as well as incidental operations do not give rise to the right to deduction. To consult the Bofip article , click 👉🏼 right here 👈🏼.
On the contrary, VAT on catering expenses is generally deductible.
Did you know? It is possible to apply a margin on re-invoiced costs. However, this margin is subject to income tax.
The VAT on the expense is deductible
If the VAT on the expense can be deducted, you will have to invoice the expense excluding tax (HT), without VAT. The VAT will be recovered on the expense according to the usual procedure.
VAT is not deductible
If the VAT on the expense cannot be deducted, you charge the expense including VAT.
👩🏻🏫 Our example : You are a communications consultant and have had to advance certain costs for your client, including:
Taxi fare for €350;
Hotel accommodation costs €450;
Catering costs of €150.
Invoices are issued in your company name, not in your customer’s name.
👉🏼 In this case, VAT cannot be deducted on taxi and accommodation online marketing & digital marketing what is a/b testing? costs, but it can be deducted on business meal costs.
You will therefore re-invoice your customer the amount including tax for costs cuba leads for which VAT is not deductible, and the amount excluding tax for those for which VAT can be deducted, namely:
€350 for the taxi (amount including tax, VAT not deductible);
€450 for the hotel (amount including tax, VAT not deductible);
€126 for business meals (price excluding VAT, VAT deductible).
The total amount of the re-invoice is €926. You recover €24 of VAT on the business meal expenses.