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Where Taxpayers and Advisers Meet

Commission on Net or Gross figure, on Swiss real estate commission

woodhall
Posts:2
Joined:Thu Apr 15, 2021 12:37 pm
Commission on Net or Gross figure, on Swiss real estate commission

Postby woodhall » Thu Apr 15, 2021 1:12 pm

We work for a real estate agent in Switzerland, supplying the images of the properties for sale, we are based in the UK & VAT registered. For payment we have arranged to get 15% of her commission from the final selling price. This figure (of her commission) she is giving us is her Net amount as she has said she has to pay tax first before we take our commission. Is this right? We are part of her expenditure & would expect to be paid via her Gross Commission amount.

Can anyone help please?

robbob
Posts:3150
Joined:Wed Aug 06, 2008 4:01 pm

Re: Commission on Net or Gross figure, on Swiss real estate commission

Postby robbob » Fri Apr 16, 2021 8:40 am

We work for a real estate agent in Switzerland, supplying the images of the properties for sale, we are based in the UK & VAT registered. For payment we have arranged to get 15% of her commission from the final selling price. This figure (of her commission) she is giving us is her Net amount as she has said she has to pay tax first before we take our commission. Is this right? We are part of her expenditure & would expect to be paid via her Gross Commission amount.
This sounds like one of those situations where there is no right and no wrong - you simply seem to not be agreeing on what you thought you had agreed on in the first place - this being the case its simply up to you two to agree what you originally ageed looks like one of you (you) will have to bite the bullet here - i would normally say if you have not made clear what you are billing the other party then you may have to take this on the chin - just ensure in future the agreements you make are not silent on matters like this. Ie my fees are 15% of gross sale price before any taxes etc


What would be different here would be if she was deducting any witholding taxes from payments made to you - i would expect those to be deducted as a matter of course - you may be able to get relief for witholding taxes - you could probably also mention these in contract negotiations if you wanted if for example for any reason witholding taxes could not be recovered.

To be fair to the other party if they have £100 sales £20 vat £120 final sale price and are paying £20 vat to their local vat authorities practicably speaking their sale is £100 not £120 - so i do see their point if she means vat when she says tax !!

woodhall
Posts:2
Joined:Thu Apr 15, 2021 12:37 pm

Re: Commission on Net or Gross figure, on Swiss real estate commission

Postby woodhall » Tue Apr 20, 2021 10:40 am

In the agreement yet to sign there is this


4. For the expenses of the contractor he receives CHF 15% of the net commission received from the client on her bank account (i.e. gross commission minus VAT and minus any third party costs such as sub-commission etc.). Any VAT on the part of the contractor may be invoiced additionally.

So the contractor does suffer the vat deduction i.e. 7.7% but it does also state: Any VAT on the part of the contractor may be invoiced additionally. Does this mean we have to invoice separately the vat deduction on a separate invoice to recover it


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