20 January 20267 min read
Technical evaluation gets weeks. The money mechanics get a five minute conversation at the end, usually with the wrong people in the room, and then generate every administrative problem of the following year: an invoice that arrives short, a tax question nobody can answer, a payment run that misses because the bank details changed.
None of this is difficult. It is simply unglamorous, and it needs deciding before signature rather than after the first invoice. This piece describes the mechanism, in general terms. It is not tax advice, and the one non-negotiable instruction in it is to put the specifics to your own accountant, because the answers turn on your country, your VAT registration and your contract.
Decide the contract currency, and say who carries the movement
Cross-border services are usually contracted in a major currency, most often euros, sterling or dollars. The important point is not which one, it is that exactly one currency appears in the contract and every invoice is denominated in it.
Whoever is not paid in their home currency carries the exchange-rate risk. If you contract in your own currency, your budget is stable and the provider absorbs the movement, which is usually priced in somewhere. If you contract in theirs, the provider is stable and your budget moves month to month. Neither is unfair. Being unclear about which one applies, and discovering it during a volatile quarter, is what causes the argument.
For long engagements, some contracts add a review clause: if the rate moves beyond an agreed band over a defined period, either side can ask to revisit pricing. A band is far better than an annual renegotiation, because it is symmetric and it has a trigger rather than a mood.
The transfer itself costs money, and someone has to be told which one
International bank transfers carry charges at the sending bank, sometimes at intermediary banks in between, and sometimes at the receiving bank. The charge instruction on the transfer decides who pays them: the sender, the receiver, or shared between both.
This is the single most common cause of an invoice arriving short. The provider bills a round amount, the payment is sent with charges shared, intermediary fees are deducted in transit, and the received amount does not match the invoice. Somebody then spends an hour reconciling a small difference every single month.
- Agree in the contract who bears transfer and intermediary charges, in words, not by habit.
- Agree whether the invoice total is the amount to be received or the amount to be sent.
- Fix the payment rail: a bank transfer, or a licensed payments provider, and put the account details in a signed document.
- Agree a change-of-details procedure requiring verbal confirmation on a known number, because supplier payment fraud targets exactly this moment.
Payment terms are a real term, not a formality
A large European buyer will default to its standard terms, which may be long. A smaller provider funds salaries monthly and cannot warehouse a long receivable without either pricing for it or feeling it. Payment terms are therefore a genuine commercial variable: shorter terms are worth asking for a better rate against, and unreasonably long terms are worth understanding the consequences of.
Beyond the number of days, settle the boring adjacent questions in the contract: the invoicing cadence, whether it is issued in advance or in arrears, what backing detail accompanies it, how a disputed line is handled, and what happens if payment is late. A provider who has never raised any of this is not necessarily relaxed. They may simply not have been paid late yet.
VAT, reverse charge and withholding
For a business in the EU or the UK buying services from a supplier outside it, the usual mechanism is that the supplier does not charge local VAT and the buyer accounts for it under the reverse charge, declaring and recovering it in the same return where it has full recovery. That is the general shape. Whether it applies to you depends on your registration status, the nature of the service and your own jurisdiction's rules.
Separately, some countries impose withholding tax on certain payments to foreign suppliers, which means you would remit part of the invoice to your tax authority rather than the provider. Whether that applies to services of this kind, and whether a double taxation treaty reduces it, is a country-specific question.
The practical instruction is short. Send your accountant the draft contract and one sentence describing what you are buying, and ask two questions: is this reverse charge, and is there any withholding obligation. Do it before the first invoice, because correcting the treatment afterwards is much more work than getting it right once.
The Lebanese context, stated plainly
Lebanon has been through a severe and well-documented banking crisis since 2019, and no buyer should pretend otherwise. What it means in practice for an engagement is straightforward: ask which legal entity you are contracting with, where it is registered, and where it banks. Providers serving European clients commonly hold accounts that make ordinary international settlement work, and a provider that cannot describe its own payment arrangements clearly is telling you something worth knowing.
It is a due diligence question, not a disqualifying one. It sits alongside the other entity checks any procurement process runs: registration, signatory authority, professional indemnity where relevant, and the data processing agreement covering personal data your team will handle.
Get finance in the room early
The cheapest version of this entire subject is one call, before signature, with the person who will actually process the payments. They will ask about entity details, currency, terms, tax treatment and how the invoice will be evidenced, and they will ask it in ten minutes.
The expensive version is the same ten minutes of questions, asked one at a time, over the first six months, by email, while an invoice sits unpaid and the provider wonders whether something is wrong.