Posts by Zachary White17

Christian Cruz41 said:"Invoices issued by earners (received by winners) after July 1st can be claimed as input tax immediately. If anyone told you otherwise—they’re dead wrong!"

Thanks APIS, but they actually just gave me an answer saying it isn't possible for this specific inquiry. Honestly, trying to get decent advice from the IRS is a nightmare...

Quoting: "A VAT registrant calculating tax based on issued invoices may deduct the tax contained in invoices marked R2, regardless of whether such an invoice has been paid yet."

The question and answer can be found under item 2, specifically via this link: http://www.irs.gov/pub/...aspx?id=18694

casualorca5 said:I also had sales tax paid on imports back in July. If it pulls into my import liability, I'll just delete the entry.
Under Section 76, Subsection 8 of the tax code, there is an option to report import tax solely for accounting purposes. A specific ruling will be issued regarding this method. It should be detailed in the upcoming IRS tax code updates. 😁

In my software, under the "tax type" selection, I have options for "Import tax paid" and "Import tax assessed." The first one is only reported as an input credit, whereas the second one gets filed as both an input credit and a tax liability.😁

Karen Rodriguez3 said:I’ve got a quick question, hopefully I'm asking this in the right spot.
So, I was reading through one of those accounting journals today:

Generally speaking, an advance payment follows some kind of signed contract, a verbal agreement, or even just a sent quote. You really have to watch out that the quote doesn't look too much like an actual invoice—especially if it lists the base price and the sales tax amount. If it does, the issuer might end up being on the hook for calculating and paying that sales tax immediately. ...
...
...An estimate usually isn't considered an invoice for an advance payment. But, if you issue an estimate that includes all the elements of a formal invoice, the issuer triggers a tax liability regardless of whether the deposit was actually paid or the goods were delivered. Plus, the recipient can't claim any input tax credits from it either."

😕
I was looking over my own quotes and the ones we get from vendors, and honestly, they all list specific line items, prices, and sales tax. They're all generated from software that makes them look identical to a standard invoice. I guess I don't know if anyone actually ends up paying that sales tax because of it.

I don't bother putting an EIN on my quotes, and I usually just include a note stating that sales tax can't be deducted based on the quote.

Ashley Ramirez4 said:ugh, anyone else notice how much they totally overcomplicate things with these sales tax forms? Like, having the VAT return, the summary report, and the excise tax filings all at once feels so redundant. For services taxed at 100%, they even say in the instructions 😵 that everything has to match—so why bother? And I haven't even figured out where the distinction is supposed to be for goods yet—like, when does something go on the main tax return versus those other two forms?

The main tax form has like ten extra line items that just make everything way more confusing than it needs to be. 😍 I mean, they already have all that data on the summary and excise reports anyway—you know, all the stuff about acquiring assets, imports from overseas, or exports to international markets.

I suppose true redundancy would be having two identical values on the exact same form. This doesn't really fit that definition. These are entirely separate documents used for different types of record-keeping and serve distinct purposes; for instance, I believe the supplemental report must be filed even by those not registered for sales tax, whereas the main return isn't required for them.

I took a little break from dealing with sales tax, and now that I'm back at it, I feel like I've forgotten everything I thought I knew.

In this B2C scenario, my supplier is based in the USA, and the invoice they sent me looks like this:
- They’ve listed two different tax IDs—one for their US branch and one for their branch in Ireland. Each ID is tied to specific line items. In one instance, they applied a 25% tax rate, while the other shows 23%, and there's an "OR" between those sections, implying I can choose which one to pay.
- My own tax ID isn't actually listed on the invoice.
- The bill includes both the goods and the shipping costs.

How am I supposed to handle things if I use one tax ID versus the other? Specifically, how would I report this to the IRS depending on which route I take?

If I end up paying the amount associated with the US tax ID, does that mean I treat them like a domestic vendor? Am I allowed to claim that tax as an input credit?

On the other hand, if I pay the amount linked to the Irish tax ID with that 23% rate, what's the protocol there? Can I actually "deduct" that tax?

Or should I just ask them for an invoice without any tax applied, including my tax ID and noting it as a "reverse charge" (though I suppose they even bother writing "reverse charge" on invoices here)?

ruggedmaker2 said:So, I did a little digging on Google and stumbled upon this PowerPoint presentation.
The second I click the link, the whole thing just pops right up, and now I’m stuck because I have no clue how to actually embed the link itself 🤷 :zbunjena:

But here’s the deal:
http://www.google.com/#gs_rn=20&gs_ri...w=1024&bih=653

Just scroll down to that bottom link where it says (ppt) VAT effective July 1, 2013.pptx - Deloitte and that should trigger it.

Hope that makes sense, if it does... 🙈

Maybe just right-click the link, select "Copy link address," and then you'll have it sitting right there in your clipboard. 🙂

casualorca5 said:A carrier from DC, say Vienna-Prague, doesn't charge Sales Tax (B2B).
The American taxpayer calculates the Sales Tax.

An American carrier transports goods for an Austrian taxpayer, say Chicago-Vienna; the American taxpayer doesn't charge Sales Tax (B2B).

An American taxpayer transports goods for an American taxpayer: the carrier charges Sales Tax.
Transport during export = exempt under Section 45 of the Law.
These are just my notes from a seminar; I suppose it takes time for it all to click. 🙄

I wonder if the service amount from a USA carrier counts toward both tax liability and input tax simultaneously, or if it just hits the liability side. In other words, are we actually exempt from Sales Tax on services provided by USA carriers?

Also, what exactly does "Value of goods delivered under procedures 42 and 63" mean?

slygardener86 said:Is it actually a mistake to issue the new style of invoices for all retail sales—meaning, with the tax calculated at the end? Because over at Synesis, they have the usual cash receipt plus the new MP invoice and the VP invoice, and apparently, we're supposed to use them like this:
1. For regular citizens: Cash Receipt
2. For the "tax credit seekers" under $233: MP invoice
3. For the "tax credit seekers" over $233: VP invoice.
It feels incredibly complicated to me—three different types of receipts, three different payment terminals, and the constant headache of potential issues (like a customer asking for a business invoice first, then changing their mind, etc.) which leads to a mountain of voided transactions that we just don't need.

So, is there any actual reason (some legal mandate or official directive) why we shouldn't just issue the new type of invoice to everyone (the VP version in Synesis, where the tax is totaled at the bottom)?
Because that would give us one single workflow for all retail, keeping everything simple—if you enter the customer info, great; if you don't, also fine. 🙂

Thx!

I've actually done exactly that in certain situations in previous years, issuing large A4 invoices with the tax listed at the end for standard retail sales, and I ran into issues with the IRS on a few occasions. They seemed to interpret it as "misleading" the retail consumer, citing some section of the Consumer Protection Act, and essentially forced us to change our workflow so that we had to issue invoices where the unit price and everything else already had the Value Added Tax baked in.

Zachary White17 said:Is it just me, or did the IRS—which apparently decided to take half the day off today—upload a completely different VAT form to their site since yesterday?

http://www.irs.gov/forms/VAT-form-example-1

http://www.irs.gov/forms/VAT-form-example-2

I guess it's hard to tell which one is actually the right one now.

The link over on Google seems broken:
http://www.irs.gov/forms/broken-link-example

It looks like the sales tax link is still pointing to the old version, maybe?

Is it just me, or did the IRS—which apparently decided to take half the day off today—upload a completely different VAT form to their site since yesterday?

http://www.irs.gov/forms/VAT-form-example-1

http://www.irs.gov/forms/VAT-form-example-2

I guess it's hard to tell which one is actually the right one now.

I haven't quite wrapped my head around this one.
In the IRS manual, what exactly is the distinction between:

"DELIVERY OF GOODS TO OTHER MEMBER STATES"
and
"DELIVERY OF GOODS WITHIN THE EUROPEAN UNION"
?

Drew Rogers6 said:I am absolutely certain about this one. It’s one of the rare things in life I actually feel certain about.😉

Yeah. I realized that later on. You don't really deal with a separate import tax anymore (unless you're importing from outside the European Union) and then try to claim it back via input tax on the sales tax form; instead, the obligation is just calculated right there on the form, and the "refund" is handled through the input tax line item immediately. Thanks for the info.

Zachary White17 said:Are you certain about that part, where it goes as both an obligation and an input credit on the VAT return simultaneously??? I suspect it might only go as an obligation. If you acquire goods from the European Union, calculate the VAT on them, and then report it as both an obligation and an input credit, the net result on the VAT return would be zero. That wouldn't leave anything to pay, which doesn't seem right. You generally have to pay that tax upon acquisition. If you only list it as an obligation, then you simply have that tax due for the period, which seems more logical. So, I imagine it only counts as an obligation.

I suppose I see the logic now. You're probably right. Currently, we pay it at the point of import and then claim it back later, but after July 1st, we’ll be calculating and claiming it within the standard accounting period. I guess I finally caught up. Hopefully.🙂

Drew Rogers6 said:If anyone knows...

What's the full rundown when we buy goods from the European Union? Up until now, my freight forwarder handled all that import stuff, but now it looks like I'm flying solo—so I guess I have to calculate the value of the goods myself and then tack on the sales tax. I assume I just list it on the tax return as both an obligation and an input credit, so there’s no actual cash out the door for it. I'm wondering what else is on the checklist—like, do I include the shipping costs up to the border in the base value? It feels redundant since there isn't even a customs duty anymore🙄. Also, which specific forms am I supposed to fill out and file...?

I did find out that we don't have to file Intrastat reports because our turnover stayed under $566667, and apparently they notify you themselves once you actually hit the threshold. Honestly, the lady at the Intrastat helpdesk for the IRS was actually super helpful and sweet for once. 🙂

Are you certain about that part, where it goes as both an obligation and an input credit on the VAT return simultaneously??? I suspect it might only go as an obligation. If you acquire goods from the European Union, calculate the VAT on them, and then report it as both an obligation and an input credit, the net result on the VAT return would be zero. That wouldn't leave anything to pay, which doesn't seem right. You generally have to pay that tax upon acquisition. If you only list it as an obligation, then you simply have that tax due for the period, which seems more logical. So, I imagine it only counts as an obligation.