When shipping an order from Denmark to Sweden, I am supposed to show both the DKK amount as well as the SEK for VAT. Is there a way to show both on the same invoice? We just started shipping Internationally and I have to think there is a way to do this without having to create two invoices.
Why does your customer need to know both currency info. If you are selling to the USA - then all your prices on the invoice should be either in US Dollars or all in DKK currency. Customer will pay by card and their bank worries about what the exchange rate is. When I buy something from Amazon in the US - if its something that I cannot get in this country - they offer to quote the price and shipping in either British Pounds or US Dollars - I don’t get an invoice with both currencies on it.
At this point in time, you cannot do both currencies on one invoice and I can’t see that being a feature that would be implemented.
It’s a Danish requirement for businesses here to provide both if they are shipping to other countries. I will double check, I admit it was something I learned early on before we were shipping Internationally so perhaps I misunderstood it.
Ah, I stand corrected - it is only a requirement to show the VAT in both currencies.
Why would the customer pay VAT if they are in the US. VAT is only payable by consumers in the local country, not by foreigners I have always understood. Having said that, I am not knowledgeable about international transactions.
Oh wow, thank you for mentioning this - I did some more research and the information I had was old. Apparently, this changed at the first of the year - frustrating that something that big was not updated on the Danish business pages, though they weren’t the government pages, just how to start a business in Denmark. I found it here - New Vat Rules from Jan 1, 2015 and Consequences of Ignoring
I guess I have an invoice to correct ASAP!
However, this question still applies. SEK (Sweden and other countries not in the EU who are not on the Euro) I would still need to show both currencies.
I speak under correction, but selling to foreigners has always been VAT free for years. VAT is a tax and a country only has the right to tax its own citizens. Other people who do not live in whichever country are not liable for those taxes. Sort of on the basis of no taxation without representation I guess. The US will never pay VAT to Euorpean firms and vice versa we are not subject to American Taxes.
I leave @lubos to help you with getting two currencies on one invoice although I would check your information as to who requires this and contact their department because I have never heard of any tax authority requiring this. Having said that, I don’t work in international markets.
Thanks for all the info! I can only guess, as I haven’t gone back to check the other page yet, that it was meant for only EU customers but I misread or it didn’t clarify or assumed people on the page already knew that information. Thank you again!
@Eccentricity, you definitely need to obtain professional accounting advice, and possibly legal advice. Many countries have tax or trade treaties that supersede the common-sense ideas @dalacor mentions. These can be very complex, not necessarily empowering one country to tax another’s citizens, but giving credit for tax paid in other jurisdictions. And definitions of where income is earned have a big impact.
Believe me, I know taking the step of shipping from Denmark to Sweden seems small, but international trade gets very complicated very fast. And the penalties can be staggering. A small, inadvertent error can literally put your company out of business.
Thank you for the info. I reached out to a couple places today that give advice to new businesses. And yes, sending a toy to a neighboring country does seem quite straight forward. Since we are not a limited liability company (rather complex to achieve in Denmark), we definitely cannot afford staggering penalties.
@Tut You make a very good point. I always seem to forget to recommend people get an accountant. I learnt a long time ago that you save far more money with an accountant than you actually spend on them and more importantly, the are clued up on issues like this. So the business saves time as they don’t have to hunt for the information and they get the correct information. An accountant is an essential for any company that wants to stay in business because the Tax man is not tolerant of mistakes.
Where did you learn about this requirement? Do you have any source?
To me, it’s non-sense.
I give you an example. Most companies pay VAT on cash-basis. In other words, they pay VAT only after they receive money from customer. Not when invoice is issued.
If invoice is issued in foreign currency, VAT amount in base currency will increase or decrease (because of fluctuation in exchange rates) by the time customer will pay. So there is no point to show VAT amount in base currency on foreign currency invoice. And none of the countries I know of require this. Because it’s - well, non-sense.
Not to mention, VAT is not typically charged on foreign currency invoices anyway.
In my country we deal with two currencies USD & LBP. the only thing am asking if possible that on the customer invoice i can add small box under the total USB a total in LBP. I only need this when the invoice delivered to the customer to show him the currency difference without calculating the results on my phone every time ( Am using the desktop version )
Never show two currencies on the invoice. Why? Because invoice can be in one currency. You can’t have customer owe you 100 USD or 150,000 LBP. You have to pick one or another.
By the time they pay, 100 USD could be equivalent of 160,000 LBP. If customer sends you 150,000 LBP, are you going to chase them for reminder of 10,000 LBP?
This is why invoice must be in single currency, can’t be in two currencies at the same time because of currency fluctuations.
What you are saying is 100% true that’s why i sad if possible i work as a freelancer IT Services all my customers pay cash so i use this to keep my client informed with the currency difference. It’s not that important ill just put a small note at the end of the invoice Thanks for your replay and i appreciate your work on the software keep up the good work
I suggest you don’t put anything there, it the customer’s responsibility to know the currency exchange rate.
A customer will insist paying the rate you stated on the invoice even if he is paying a decade later, why ? Because you stated it there.
Put it there if you don’t want to take advantage of the currency fluctuations in your country.