Intra-EU freelancer / contractor invoicing rules (taxes)

Question

I have a very specific question about invoicing a company in another EU country. The circumstances are as follows:

1. I live in country A.
2. The Company being invoiced resides in country B.
3. I have a bank account in country B.
4. I am a part-time employer (employed in country A).
5. I want to invoice the Company in country's B currency (money would be then transferred to my bank account in country B).
6. I want to pay taxes related to these invoices in country A.

Is that generally accepted pattern / scenario? Does that mean the invoice should include VAT? If so, which country's tax rate should I use?

Answer 1

I used to do the same thing (Part-time employed in country A, as well as self-employed invoicing other clients in country B in a different currency), so I'll tell you what I did.

1. Create a self-employed company in country A
2. Create a bank account in country A - with currency of country B, and link that account to your self-employed company
3. Ask your Revenue office (from country A) to issue you a VIES number. In this case you'll be allowed to invoice any company in EU, and shouldn't be worried about VAT.

After all that you should pay tax to the Revenue office from country A according to country A regulations.

I want to invoice the Company in country's B currency (money would be then transferred to my bank account in country B).

As far as I know that's only possible if you create a self-employed company in country B.

NOTE Please be advised that I'm not an accountant or a lawyer, for a specialized answer contact your local Revenue office.