What is the amount of expenditure that is re-invoiced to me: the “HT” or “TTC” amount?
In most cases, the freelancer will re-invoice expenses and not reimburse disbursements.
These will therefore be professional expenses incurred in his name to carry out the project.
The amount retained for this re-invoicing, excluding taxes (HT) versus including all taxes (TTC), will depend on several factors, starting with whether or not the freelancer is subject to VAT.
If the freelancer benefits from the VAT exemption, he cannot recover the VAT on his expenses; the re-invoicing will therefore be done for its amount including VAT.
If the freelancer is subject to VAT, it will then depend on the rules applicable in the country in which the freelancer carries out his activity. If these rules authorize the recovery of VAT on his expenses, then the re-invoicing of expenses will be done for its “excluding tax” amount.
Why is the re-invoicing of expenses subject to VAT?
First of all, it is useful to remember that the re-invoicing of professional expenses follows the same tax regime as the fees for the project. Consequently, if the fees are subject to VAT, the re-invoicing will also be subject to VAT, at the same rate as these fees (and this, regardless of the VAT rate applicable to the expense).
For example, a catering expense that has supported VAT at the rate of 10% (e.g.: €100 excluding VAT + €10 VAT), the deduction of which is not authorized at the freelance level, will be re-invoiced for its amount including VAT (€110) and will then be subject to VAT at the same rate as the fees (e.g.: VAT of 20%, i.e. €110 + €22 VAT = €132 including VAT).
The re-invoicing of costs for their “including tax” amount with “additional” VAT (VAT for the mission) should have no impact on the client because the latter can in principle recover the VAT invoiced (in our example: VAT of €22).
Re-invoicing will therefore result in putting you in the same situation as the freelancer: you will record a charge equal to the freelancer's expenditure for its amount including tax (in our example: a charge of €110).