In cases where the agent acts on his behalf, for example. B in cases where the Agency`s relationship is not disclosed to the third party, that third party treats the agent as “primary obligatory.” A particular sector using the term “agent,” where agreements are generally not “agency” in the normal sense of the word, is recruitment or staff in which the company employs acting staff. In this case, it is how individuals` employment plans are regulated. The agent is an obvious agent when the agency relationship is passed on to the third party. If there is a written agreement, you must test that agreement based on these factors. If each item clearly refers to the Agency, the Agency will succeed subject to the consistency check below. Similarly, there will be no agency if each factor clearly indicates a relationship between two principles. If the results are contradictory, you should check if your trade is listed in VTAXPER60000, as this explains the main information factors in some trades. However, the term “agency” is used in other situations where VAT treatments are different. I have summarized three of the most common situations as follows: in accordance with paragraph 22.2. of paragraph 700, the following conditions must be met before an agency agreement is reached: N.B Sometimes agents acting as contractors establish a single invoice for goods/services and their agency service. In the example above, the agent would issue a single invoice for the sale of the products and agency service to the customer for a total of 230 USD plus 20% VAT 46 USD. Although written contracts between the parties concerned must first be considered, the agreements may not themselves determine the VAT situation, even after considering the six factors mentioned above.
In this situation, beyond the agreements, you need to look at the big picture and consider all the facts, including the merchant`s work practices, to make a decision on agent/principal status. Each case depends on its own circumstances. The concept of the “Agency” is different in most other EU countries and many third countries. This is because their law is based on Roman legal terms that treat “agents” as if they buy and sell goods under agreements called “Commission” agreements. In this case, the law does not recognize a separate provision of agency services to the client. If the roles of the parties are confused, the wrong person can recover VAT or vat may be overlooked by all parties. But what is more dangerous is that tripartite problems can arise in other circumstances, which are not so easy to identify, and companies and their accountants may find themselves blindly in trouble. The result? Potential penalties, interest on late VAT when the error is detected, and what happens when there is a contradiction between the commercial reality of a transaction and what the contracts say.