This article explains Malt billing models, invoice generation, and VAT management on the client side.
- Malt issues invoices via a billing mandate (direct model or Unique Provider model).
- Three invoices are generated at the end of each project: service, client service fees, and freelancer commission.
- Applied VAT depends on the Malt entity issuing the invoice and your location.
How does the Malt billing mandate work?
Malt has a billing mandate, which allows it to issue invoices either on behalf of the freelancer you work with, or on your behalf (as the client).
At the end of your project, documents such as quotes and invoices are automatically generated and issued by Malt in your company's name. That is why it is important to provide accurate information in your account settings. These documents have a standardised Malt header and include the freelancer's billing details as well as your company's.
What are the billing models?
Malt offers two main billing contract models:
| Direct model | UP model |
|---|---|
|
This allows you to contract directly with the freelancer. Advantages include strong legal protection under labour law, coverage by the freelancer's Hiscox Professional Civil Liability insurance, and the freelancer's commitment to project success. |
This model provides a single invoice issued by Malt that includes the project cost plus Malt's service fees. Malt signs a framework agreement with you (the client) and subcontracts the work to the freelancer via a mirror contract, so there is no direct contract between you and the freelancer. |
If you want to benefit from the Unique Provider model, please contact your account manager.
How does the Unique Provider model work?
- You choose the freelancer to work with and freely negotiate the service terms.
- A framework contract is signed between you and Malt, specifying the project execution terms.
- Malt then signs a back-to-back agreement with the chosen freelancer, which is a mirror copy of the agreement between you and Malt.
- Malt ensures the freelancer meets the commitments made to you.
The advantages of this billing model include strong legal protection under commercial law and coverage by Malt's Hiscox Professional Civil Liability insurance.
How do I generate a purchase order?
Capture: adding a purchase order to the quote
Before starting a project, add your purchase order directly to the quote on the service page. This facilitates accounting reconciliation, as your accounts department can match the internal purchase order with the freelancer's invoice number at the end of the service.
How do I create and download invoices?
The final invoice is generated when the freelancer marks the project as complete for task-based projects, and at the end of each month for time-based projects.
Three invoices are issued:
- The first invoice covers the service and is issued between you and the freelancer
- The second invoice covers service fees and is issued by Malt to you
- The third invoice corresponds to Malt's commission and is issued by Malt to the freelancer
For time-based projects, the invoice statement is sent to the accounting email address you entered in your settings once the project or month is validated.
To find and download your invoices, you can either go to the mission page and click "download invoice statement", or access the complete invoice history in the "Invoices & payments" section of your account.
How do I modify a project in progress?
If your project evolves and you and the freelancer agree to update the quote, the final invoice will reflect the change made.
For a task-based project, the process to modify a quote is as follows:
- The freelancer updates the quote on the project page
- You validate the new modified quote
If the project includes prepayment:
- If the quote is reduced, the difference will be refunded to you within 2 working days to your wallet after the end of the project
- If the quote increases, you will need to pay the additional amount shown in the new quote. Payment can be made directly on the project page by card or bank transfer
How is VAT managed?
Malt's different legal entities have a direct impact on:
- VAT applied to commission invoices under Direct and Unique Provider (UP) models
- VAT applied to freelancer service invoices under the Unique Provider model
For each project, the entity you declare to issues both the freelancer commission invoice and your service fee invoice.
| Malt SA | Malt SL | Malt BV | Malt SRL | Malt Gmbh | Malt Limited |
|---|---|---|---|---|---|
| France and rest of the world | Spain | Netherlands | Belgium | Germany (from Sept 2023) | UK (from Sept 2023) |
For example, if you are a UK client working with a freelancer registered in Germany, Malt Limited will issue your commission invoice since you are based in the UK.
When is VAT applied to the commission invoice?
Remember, it is the client entity that issues the fee invoice. If the Malt entity issuing the invoice is located in the same country as you, VAT will be applied to the fee invoice. If the Malt entity issuing the fee invoice is in a different country from yours, VAT will not be applied, in accordance with the reverse charge principle.
The same rule applies to service invoices under the Unique Provider (UP) model, where the billing entity corresponds to your registered entity.
For example:
• If you are a freelancer based in France and your client is in Germany, the fee invoice will be issued by Malt's German entity, so VAT will not be charged.
• If you are a freelancer based in France and your client is in the United States, the fee invoice will be issued by Malt's French entity, so VAT will be applied.
What is VAT reverse charge?
VAT reverse charge means that when a freelancer provides services to a client located in another country, the invoice is exempt from VAT, and the client is responsible for declaring and paying VAT to their tax authority.
VAT reverse charge only applies if the freelancer provides their intra-community VAT number. Otherwise, the VAT rate in force in the supplier's (freelancer's) country applies.
This system was established in the European Union to simplify cross-border B2B commercial exchanges.