You often engage costs for your work, that sometimes can be charged to your client (e.g. travel or material expenses). Application of VAT may often be confusing when writing your sales invoice. Here, we explain the basic principles regarding VAT and give you an overview of how to apply billable expenses to your sales invoices.
(Frais avancés / Voorgeschoten kosten)
In principle, these are expenses you pay on behalf of someone else, so the invoice (linked to the expense) is not in your name. You make an expense in your customer's name and on his behalf, you advance him the money, nothing more!
→ Example: Your customer invites you to a restaurant and when it's time to pay the bill, he realizes he's forgotten his wallet. So you pay for him, and he insists that you re-invoice the amount.
(Refacturation de frais / Kosten doorfactureren)
In practice, this is what happens the most often |
It's as simple as that: everything that is not an advanced cost. If you don't meet all the conditions to qualify as advanced expenses under art.28, 5° CTVA, then you're talking about billable expenses.
In the case of a billable expense, the invoice for the expense is in your name and you have paid it. For various reasons, you are going to re-invoice these costs in full or in part to your customer.
→ Example: You're a plumber who needs to replace a customer's toilet flush. You buy the flush from your supplier and receive a purchase invoice in your name (with your contact details, VAT number, etc.).
🚨 The crucial distinction is made at the point of the expense: who pays and whose name is on the purchase invoice? |
When you invoice your customer, you are simply asking for reimbursement of the amount advanced. You absolutely must issue an invoice in the customer's name, and do so without VAT as required by law (art.28, 5° CTVA). The amount advanced and then invoiced to obtain the refund is not part of the taxable income.
🚨 Warning: Do not charge any surcharges or mark-ups! Advances are not included in your tax base if the invoice shows the exact amount without applying VAT. → If you ask for a majoration or supplement, then you are asking for more than you have advanced, and this is then considered a service performed for which you are compensated. In this case, VAT must in principle be applied to the total amount (Art.26, §1 CTVA). |
💡 A principal operation occurs when you have supplied a good or service that is directly linked to your self-employed activity and, on this occasion, you re-invoice the customer for certain costs directly linked to the good or service supplied.
If the costs are re-invoiced as part of a main operation, then the rate to be applied is the same as the main operation. In accounting terms, and for VAT purposes in particular, the accessory (in this case, the toilet flush) follows the principal (in this case, the installation of the flush).
🚨 Warning: Your invoice must clearly separate the service provided and the re-invoiced expenses, and in this case, your invoice will have two separate lines. If you re-invoice the costs in a separate invoice: same principle, the VAT rate should follow the rate of the main operation. |
If the expenses are not related to the main operation, the re-invoiced expenses follow their own VAT rate, i.e. in your sales invoice, the VAT rate on the re-invoiced expenses will follow the VAT rate on the purchase invoice.
On the other hand, if the expenses are outside the scope of VAT (= exempt from VAT, e.g. insurance company, school or university education), then there is no VAT to be applied when re-invoicing.
⚠️ Warning – Advanced costs:
These invoices should not be sent to your client via Peppol, but only by email or PDF.
In the Revenue tab:
You can create the invoice in Accountable and then send it to your customer via email or PDF (not Peppol). Once your customer has received the invoice, you will need to delete it, as it cannot be considered as revenue.
Make sure to keep a copy of the invoice in case of an audit.
In the Bank tab: Classify the two transactions as a "Personal payment".
🚨 Warning: Never add the purchase invoice to the Expenses tab, as the purchase invoice is not in your name and therefore cannot be considered a deductible expense. |
→ Example: As part of an assignment for your customer, you incur expenses for a train journey. You will therefore purchase a train ticket, which you will re-invoice to your customer.
In the Expenses tab: You need to add the purchase invoice to the corresponding category (in the example of the train ticket, the VAT will be 6%).
In the Revenue tab :
🚨 Reminder: Your invoice must clearly separate the service provided and the billable expenses, and in this case your invoice will have two separate lines. If you re-invoice the charges in a separate invoice: same principle, the VAT rate should follow the rate of the main operation. |
→ Example of an invoice with the billable expense :
⇉ The re-invoiced train ticket is on a separate line and follows the same VAT rate (here 21%) as well as the main operation category:
→ Note: The amount I spent on the €50 including VAT train ticket, will be the amount excluding VAT when re-invoicing the cost.
In the bank screen: You can link transactions to expenses and revenue, respectively.
If you have any questions, please feel free to contact us via chat or by email to the following address: support@accountable.eu
Author - Valesca Wilms
As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.
Who is Valesca ?Thank you for your feedback!
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