Article from
Uniform VAT for Main and Ancillary Services.
Generally speaking for service companies:
It is rare for different tax rates to apply simultaneously on an invoice. Typically, we refer to main and ancillary services.
(English image not yet available) Ancillary services are those that do not have their own economic purpose.
They are
- Incidental compared to the main service
- Closely related to the main service
- Supplements, enhancements, or completions of the main service
- Usually provided together with the main service
The cost relationship between main and ancillary services is irrelevant for assessment. The costs of the ancillary service can be higher than those of the main service.
Rule of thumb: The ancillary service shares the fate of the main service regarding the tax rate.
According to the law, the ancillary service shares the tax fate with the main service. In other words: How the main service is assessed for VAT purposes, the entire service is taxed uniformly. Therefore, only the tax rate applicable to the main service is applied.
This applies in Germany as well as in Switzerland and Austria.
Specific examples include:
- Personal expenses like travel costs (ancillary service) related to a consultancy service (main service)
- Printing costs (ancillary service) for magazine design (main service)
- Hosting or image material in website development
- Packaging and postage costs (ancillary services) for the delivery of items (main service)
- Artists' social security contribution or KSK
Rebilling additional services like personal expenses with gross or net amount?
Neither is explicitly prescribed. It can be determined independently or agreed with the client.
It is common,
- for VAT-liable companies to charge expenses at their net value, so the client does not pay tax on tax.
- for non-VAT-liable companies to charge gross, as the invoicer cannot claim input tax deduction and would have to bear the VAT amount themselves.
Original receipts must remain with the invoicer
The original receipts for rebilled additional services must not be given to the client in original form but only as copies if proof is required.
Further links on the topic
Links | Switzerland
"Ancillary services are closely linked to the main service. The main service represents the actual core and is in the foreground, while the ancillary service is only incidental. Ancillary services are treated the same for tax purposes as the main service."
Links | Germany
agd.de
„How the main service is assessed for VAT purposes, the entire service is taxed uniformly. Therefore, only the tax rate applicable to the main service is applied.“
„How the main service is assessed for VAT purposes, the entire service is taxed uniformly. Therefore, only the tax rate applicable to the main service is applied.“
https://www.haufe.de/finance
https://www.steuerberaterin-berlin.com/pdf/Checkliste-Weiterberechnung-Auslagen-Auftraggeber.pdf
https://www.steuerberaterin-berlin.com/pdf/Checkliste-Weiterberechnung-Auslagen-Auftraggeber.pdf
Links | Austria
11.1.5.7.2.1519 Different tax rates
"Dependent ancillary services are subject to the same tax rate as the main services. (...)"
"Dependent ancillary services are subject to the same tax rate as the main services. (...)"
Disclaimer: This article was created in collaboration with experts. However, we do not guarantee the accuracy of the information.
