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About VAT

Xavier Damman

Posted on February 19, 2020

Open Collective Europe is a very generic fiscal host for the eurozone. Given the wide variety of communities and their various locations in Europe, we can only offer very generic support to all collectives.

As such, each collective is considered as an unincorporated partnership for which the fiscal host is holding money on their behalf. Collectives cannot use the non profit entity to sign contracts, issue invoices, etc.

That means that whenever you need to invoice a collective hosted on Open Collective Europe ASBL, you actually need to invoice the unincorporated partnership. So the “bill to” address should be the name of the collective followed by the name and address of one of the core contributors of the collective. That also means that you should add the VAT like you would normally do when invoicing an individual customer.
Likewise, collectives cannot get VAT back on the products and services they buy.

Note also that there is no VAT on donations.

When do I need to worry about VAT?
If your collective plans to offer products and services on a regular basis, you should apply for your own VAT number. If that’s the case, we would highly recommend you to create your own fiscal host for your collective that could also act as a fiscal host for collectives like yours in your country. The more open collective hosts the more they will be able to focus on a certain type of collectives and be in a position to offer more services to help them focus on their mission.

Andre Staltz

Posted on February 19, 2020

That also means that you should add the VAT like you would normally do when invoicing an individual customer.

Hi Xavier, thanks for the clarification. Just to make sure I understood correctly: I have been invoicing the collective the "wrong way" (with the Open Collective Europe ASBL address) since 2018, and I have also marked the invoices with "Reverse VAT Charge", and this has been normal practice without raising any concerns so far from Open Collective Europe. So if I invoiced 500€ to the collective, I got paid 500€ (suppose my collective's balance is 502€, leaving 2€ remaining) and didn't have to consider VAT because it was marked "Reverse VAT Charge". With these new changes, does it mean my invoice would have to remove "Reverse VAT Charge" and charge for 403€ + VAT (24% equivalent to 96,5€)? Is that the correct way?

Andreas Schuderer

Posted on February 24, 2020

Thank you for the explanations, Xavier! Is this also why, inversely, there is no address on the invoices/receipts by the Open Collective Europe ASBL Fiscal Host that donors/sponsors can download from their transactions page (see screenshot from an invoice below)?

I am confused because the top-level Open Collective documentation states that an invoice will be issued (https://docs.opencollective.com/help/collectives/tiers-goals#do-i-get-an-invoice), and on https://docs.opencollective.com/help/fiscal-hosts/local-tax#vat, the documentation says "We will apply the VAT rules accordingly", followed by details. Do these things not apply to the case of the Open Collective Europe ASBL Fiscal Host? Are there other european Fiscal Hosts which are more fitting? I think I saw that you are organizing Events and such, which, according to the docs page above, should be fiscally comparable to service and product tiers ("VAT will only apply if the collective creates a SERVICE or PRODUCT tier and for events"). Do you use another Fiscal Host for events?

Also, the documentation at https://docs.opencollective.com/help/fiscal-hosts/sponsor-agreement#sponsorship-agreement-template says "The entity forming a legal agreement with the sponsor is your Fiscal Host", which does not sound like the description of the Open Collective Europe ASBL Fiscal Host at all: ("That means that you cannot use the Open Collective Europe ASBL non profit as the point of contact, billing address or legal entity responsible for your activities"). Does this and the main Open Collective documentation contradict each other or are there some nuances which I simply don't understand?

The reason I am asking in particular is, with how invoices by Open Collective Europe ASBL currently look like, I am wondering whether the "support" tier is at all compatible with Open Collective Europe ASBL, even without VAT (I did read your last paragraph and I don't expect to need to apply for a VAT number due to local laws for low-volume/non-regular transactions).

Sorry for all those questions. I'm just quite confused on (the available European) Fiscal Hosts. I appreciate your thoughts. Thanks!

Andre Garzia

Posted on April 20, 2020

This is a bit confusing for me as well. Can we see an example of an invoice (even if ficticious) with the correct way of addressing, please?

From what I understand I should invoice myself. The VAT part is also not clear to me.


Jean-François De Hertogh

Posted on April 30, 2020

Hi,
I joined an example of invoice. It's pretty basic. The thing is: you have to invoice the collective (i.e. Patchforx). When doing so, you'll need to write down the name and legal address of one of the person responsible of this collective (see core contributors - admin  https://opencollective.com/patchfox#section-contributors)

About VAT, unless you are selling products via your collective, you cannot use OCE number nor name and address.






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