What amount will be re-invoiced to me: the pre-tax (HT) or the all-taxes-included (TTC) amount?
Usually, freelancers re-invoice expenses rather than reimbursements. These are professional expenses they incur on their own behalf to complete the project.
Whether the re-invoiced amount is excluding tax (HT) or including tax (TTC) depends mainly on whether the freelancer is subject to VAT.
If the freelancer is VAT-exempt, they cannot reclaim VAT on expenses, so they re-invoice including VAT.
If the freelancer is VAT-registered, the rules of their country determine if VAT can be recovered on expenses. If yes, expenses are re-invoiced excluding VAT.
Why is VAT applied to expense re-invoicing?
Expense re-invoicing follows the same VAT rules as the project fees. If the fees are subject to VAT, expense re-invoicing will also be VAT-taxed at the same rate, regardless of the VAT rate originally applied to the expense.
For example, a catering expense with 10% VAT (€100 net + €10 VAT), which the freelancer can’t deduct, will be re-invoiced at €110 including VAT. Then, project VAT at 20% applies, resulting in €110 + €22 VAT = €132 total.
Client can generally recover the VAT charged on the re-invoiced costs (in this example, €22), so the total expense remains €110. You, as the client, will record the expense equal to the freelancer’s cost including tax (€110).