Finance

How to issue invoices as a freelancer in 2020

How to issue invoices as a freelancer in 2020

Being a freelancer can be a highly rewarding experience. After all, as the boss of your small business, you can set your hours and you are directly in charge of how much money you can make. On the one hand, it provides an incredible amount of freedom and on the other, it requires you to take many matters into your own hands.

As a freelancer, you have to request payments and follow up on when your payment is due for your products or services that you agreed with a client. This can sometimes be difficult to do, especially if you are juggling many projects and clients simultaneously. Issuing a professional invoice can become overwhelming, so let's talk about how to make it easier.

VAT invoices

Soon after you start freelancing, you will come across the concept of value-added tax (VAT). If a client lives somewhere VAT is in effect, they will want to see a VAT invoice. This type of invoice is a document that lays out the details of a service, your contact information (i.e. your phone number and email address) and any other relevant data such as your banking details.

Providing a VAT invoice will help your VAT-registered clients reclaim the VAT that was charged to them. It will also boost your client retention rates, especially when it comes to holding onto long-term clients.

When is an invoice valid?

A valid invoice contains the following: 

  • The party being billed

  • A PO (purchase order) number when necessary and the contact person

  • Invoice number 

  • Invoice date

  • Supplier details

  • Service details

  • Agreed amount to be charged to the client

  • Applicable VAT amount and VAT rate

When you send an invoice including a VAT statement, yet excluding a VAT number to your client, they will not be able to claim the VAT back. This may lead to a drawback from paying your invoice on its due date. If you do have a VAT number that you can include in the invoice, the invoice can act as a receipt for them, which they can use to deduct the VAT amount from their taxes.

? Countries requiring VAT ID for invoicing and VAT rates

Country

Tax Rate

AUSTRALIA GST2 10%
AUSTRIA
VAT 20%
AZORES (Portugal)
VAT 18%
BELARUS
VAT 20%
BELGIUM
VAT 21%

BOSNIA & HERZEGOVINA

VAT 17%

BOTSWANA

VAT 12%

BRAZIL

VAT 7-18% (per state)

BULGARIA

VAT 20%

CANADA

GST 5%

CANARY ISLANDS

VAT 0%

CEUTA (Spain)

VAT 0%

CHILE

VAT 19%

CHINA

VAT 17%

 

CORSICA (France)

VAT 20%

 

COTE D’ IVOIRE

VAT 20%

CROATIA

VAT 5-25%

CURACAO

VAT 6-9%

CYPRUS

VAT 19%

CZECH REPUBLIC

VAT 10, 15, 21%

DENMARK

VAT 25%

ESTONIA

VAT 20%

 

FAROE ISLANDS (Denmark)

VAT 25%

FINLAND

VAT 24%

FRANCE

VAT 20%

GERMANY

VAT 19%

GIBRALTAR

VAT 0%

GREECE

VAT 24%

 

GUADELOUPE (France)

VAT 2.1, 8.5%

 

GUERNSEY (United Kingdom)

VAT 0%

HONG KONG

GST 0%

HUNGARY

VAT 27%

ICELAND

VAT 24%

INDIA

VAT 1-5%, 15%

INDONESIA

VAT 10%

IRELAND

VAT 23%

 

ISLE OF MAN (United Kingdom)

VAT 20%

ISRAEL

VAT 17%

ITALY

VAT 22%

JAPAN

VAT 8%

JERSEY (United Kingdom)

GST 5%

KAZAKHSTAN

VAT 12%

LATVIA

VAT 21%

LEBANON

VAT 11%

 

LESOTHO (SACU)

VAT 15%

LIECHTENSTEIN (Admin by Switz.)

VAT 7.7%

LITHUANIA

VAT 21%

LUXEMBOURG

VAT 0-17%

MACAU, CHINA

VAT 0%

MACEDONIA

VAT 18%

MADAGASCAR

VAT 20%

MADEIRA (Portugal)

VAT 22%

MALAYSIA

SST (VAT) 5-10%

MALTA

VAT 18%

MARTINIQUE

VAT 2.1, 8.5%

MAURITIUS

VAT 15%

MAYOTTE (France)

VAT 0%

MELILLA (Spain)

VAT 0%

MEXICO

IVA 5 16%

 

MIQUELON (France)

VAT 0%

MOLDOVA

VAT 20%, reduced rate: 8%

MONACO (Admin by France)

VAT 20%

MONGOLIA

VAT 10%

MONTENEGRO

VAT 19%

MOROCCO

VAT 20%

NAMIBIA (SACU)

VAT 15%

NETHERLANDS

VAT 21%

NEW CALEDONIA (France)

GTC (VAT) 3-22%

NEW ZEALAND

GST 15%

NORWAY

VAT 25%

PAKISTAN

GST 13-17%

POLAND

VAT 5-23%

PORTUGAL

VAT 23%

PUERTO RICO (USA)

VAT 11.5%

REUNION ISLAND (France)

VAT 2.1-8.5%

ROMANIA

VAT 19%

RUSSIA

VAT 18%

SENEGAL

VAT 18%

SERBIA

VAT 20%

SINGAPORE

GST 7%

SLOVAKIA

VAT 20%

SLOVENIA

VAT 9.5-22%

SOUTH AFRICA

VAT 15%

SOUTH KOREA

VAT 10%

SPAIN

VAT 21%

SRI LANKA

VAT 15%

ST. BARTHELEMY (France)

VAT 2.1-8.5%

ST. MARTIN (French side)

VAT 5%

ST. PIERRE (France)

VAT 0%

SWAZILAND (SACU)

Sales tax (VAT) 15%

SWEDEN

VAT 25%

SWITZERLAND

VAT 8%

TAHITI (France)

VAT 16%

TAIWAN, PROVINCE OF CHINA

VAT 5%

TASMANIA (Australia)

GST 10%

THAILAND

VAT 7%

TUNISIA

VAT 19%

TURKEY

VAT 18%

UNITED ARAB EMIRATES

VAT 5%

UKRAINE

VAT 20%

UNITED KINGDOM

VAT 20%

WALLIS & FUTUNA (France)

VAT 2-6%

Make invoicing easy

By choosing Rimuut, you can easily create an invoice, track your payments and get paid on time. Rimuut enables freelancers to issue VAT invoices without having to be a business owner! After you issue your online invoice, your actual commercial invoice is sent to your e-mail address immediately. You can use this VAT-ready freelance invoice to secure your payments and get paid faster.

author name

Chloe Frederick

Blogger at Rimuut Read more...

Start a Virtual Company today

No setup fee. No subscription fee.
Flat pricing when you get paid.

No Setup Fee - No Paperwork - No Bureaucracy