Difference with a disbursement
Reinvoicing costs and disbursements look similar: in both cases, you advance a sum that is reimbursed to you afterwards. The key distinction is knowing in whose name the expense was incurred. In practice, check the name on the original document (invoice, payment request).
| Reinvoicing costs | Disbursement |
Expense in the name of | You | Your client |
Amount on your invoice | No rule (margin possible) | Exact amount to the cent |
Accounting | As income and expense | Neither income nor expense |
VAT | Applicable | Not applicable |
Method | List the reinvoiced cost as a separate line on the invoice | Do not include on the invoice (disbursement note outside accounting) or use a specific "disbursement" line on your invoice |
Examples |
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I'm reinvoicing the sending of a registered letter or my travel costs â do I need to apply VAT? Yes, VAT applies, because there is a corresponding expense in your activity.
đĄ A disbursement is neither a deductible expense nor taxable income. It is simply a transfer of money that passes through you. No VAT applies.