Processing Fees Passed On to Service Supplier - Use Case

[JeffBond]

To be as concise and clear as possible, I will just drop a use case here. Thank you.

I am a Business (A) supplying services to a EU company (B). B pays me using an e-wallet service (C).

C is withholding a charge deducted from the amount sent before it reaches A's e-wallet, so if A charges 100 for its services, B sends 100 via C. C keeps 0.5. A receives 99.5 then C charges another 0.25 to A.

Given those parameters, what to write on the VAT invoice(s) and what to enter in the VAT return (input and output)?

 

[Scalloway]

Your sales are 100. That is what you invoice B for.

The charges by C are an expense.

 

[Paul Kelly ICHYB]

The transaction charges are your issue (assuming they are you supplier).