Posts by vividotter912

vividotter912 said:I looked into property services over in Austria.
An American taxpayer is required to register there for VAT purposes.
What's the move here—do I issue the invoice with tax or not, and where does it go on the return? help please...🙏

Correcting myself, if anyone cares, (maybe ruggedmaker2👍)
Turns out registration isn't required for real estate services in Canada; it falls under the reverse charge rule per the IRS code. That's what my consultant at the Police Department told me...

I looked into property services over in Austria.
An American taxpayer is required to register there for VAT purposes.
What's the move here—do I issue the invoice with tax or not, and where does it go on the return? help please...🙏

I keep asking questions, yet I always overlook one crucial detail.
As I mentioned earlier, I am invoicing for construction services in Canada on a real estate project involving our own materials, but I neglected to ask if the whole package is classified as a service?
Both the labor and the materials...😵

ruggedmaker2 said:You’ve got to register for VAT purposes in a second state if you’re actually running business operations within its borders.
Take real estate, for instance. Usually, the tax location is wherever the property sits, but individual states have the power to set their own rules or carve out specific exceptions. (I'm bringing this up because I once handled a job on a property over in Canada, and we didn't even need to register there because we fell under one of their local legal loopholes)
It’s entirely up to each state how they play it, so when those situations pop up, you really have to dig into that specific state's statutes.
The first step is always identifying the exact taxing jurisdiction—once you nail that down, everything else follows.

Look, my point is this: when you're dealing with messy, complicated business setups, you can't just wing it. You have to do your homework and know exactly how things work before you even start.

Thanks, ruggedmaker2, for the reply. I did some digging through your old posts and found this one. It sounds like your situation was just like mine: doing property work in Canada without needing to register.
I actually called some consultants—I think it was Ms. Wolf—and she suggested that a simplified tax procedure applies in Canada.
Does anyone know where I can find a list of countries that allow that kind of thing?

vividotter912 said:I'm issuing an invoice for construction services performed in Mexico.

What exactly should I include in the notes:
the service is not taxable under Section 19 of the Tax Code, or
the tax liability is transferred per Section 19...

I know the invoice needs to be in dollars, but if I want to show the amount in euros as well, do I just use
the mid-market exchange rate?

🐔

I'm confused again, so I need some help.
I have an invoice from the USA dated 10/23/2015 (invoice date)
It was paid on 10/20/2015.
When recording the incoming invoice, which mid-market exchange rate should I use...
The rate from 10/20 when the payment went out, or 10/23 from the invoice date?🙂

I'm issuing an invoice for construction services performed in Mexico.

What exactly should I include in the notes:
the service is not taxable under Section 19 of the Tax Code, or
the tax liability is transferred per Section 19...

I know the invoice needs to be in dollars, but if I want to show the amount in euros as well, do I just use
the mid-market exchange rate?

Ryan Rogers4 said:It doesn't matter that it wasn't in the same account. My foreign currency account is 1030.
Then just book it like this:
1030/- the $1,000 amount at the mid-market rate on the day of the refund ($2533)
-/2210 (Vendor) $2500
-/77xx $33 (Exchange difference)
4xxx/1030 75.99 (the $10 amount x Federal Reserve mid-market rate) if the bank doesn't send separate fee invoices, or
2200/1030 75.99 if the bank does send fee invoices.

Don't let it trip you up—just because you paid from one account and the money came back to another doesn't change anything. It's all your money.🙂

Thanks, dear.😉

Ryan Rogers4 said:Post the deposit to the same account where you recorded the initial $7,500 outflow. For the Euro account, record the 1,000 Euros using the exchange rate from the day it hit the account. That difference between the two is your foreign exchange gain/loss. Then, just book the bank fee using the daily exchange rate—either under 4xxx/10xx or 220/10xx if your bank sends a separate invoice for those fees.

I didn't quite follow you...
So, when I paid via the statement, I debited the vendor and credited the account for that $7,500 amount.
Now they're refunding me, but the money isn't hitting my USD account—it's going into the foreign currency account.
Should I open a new sub-account, like 1001, and record the debt using the Fed mid-rate, or what...(please, just give me a workflow) I get the part about exchange rates, thanks.🙂

Not sure if this is the right thread, but I need some help.
I made a payment in the USA from my USD account for 1,000 Euros—just a standard conversion.
On my USD statement, it shows up as $2500. It was for a security deposit. Anyway, the deposit has been returned, but my Euro account is sitting at 990 Euros. A German client sent 1,000, but I guess there was a 10 Euro fee somewhere.
How am I supposed to book this mess... any advice would be appreciated.🙏

ruggedlynx63 said:Look, you just calculate everything based on the Federal Reserve's average rate for that specific day. As for the leftover difference, you just book that under foreign exchange gains or losses...

Since my USD statement shows a higher amount paid than what was booked on the account (based on that Federal Reserve rate)—meaning a negative FX difference—should I be booking it as:
2210 P
4.... D

I need some help regarding how to record an invoice.
I received an invoice in dollars for a vehicle purchase, which was paid via the Federal Reserve—meaning at their rate (I assume) on October 20th.
When I'm recording this invoice, which exchange rate should I be using?
I read somewhere that I have to use the Federal Reserve middle rate from that specific day, October 20th, 2015.
So, what do I do about the discrepancy... do I report an exchange rate difference or the bank fees? The amount on my Federal Reserve statement is higher than the amount in dollars when I calculate it using the Federal Reserve rate.
thanks

Sam Evans said:Well, everything changes now that you've clarified the details. When they issue you a net invoice and you're operating as a business, you end up paying the VAT back home in the States... they basically plug your tax ID into their system so that you're the one responsible for reporting and paying the sales tax here in America. If they give you a net price in Germany, you calculate the 25% tax on top of what you paid, report it on your tax filings, and handle the specific vehicle excise taxes... you bundle all of that into the total acquisition cost of the car. If it's classified as an N1 light truck, you won't deal with those specific heavy vehicle taxes, just the standard homologation and registration costs.
They're being a little tricky by saying they'll refund it only after registration or once you email a scan of the verified CMR...🙂

Right, an N1 is a commercial vehicle. So, in the VAT return, I record both the VAT liability and the input tax, correct? Everyone keeps saying "pay the VAT," which is confusing...
Does the VAT return have a specific deadline, or is it always by the 20th of the month?

Sam Evans said:How am I supposed to request cash if we paid based on a quote? And I don't get why you'd need a freight forwarder when we're in the US and the company handles everything... just pay the bill and send someone to pick up the vehicle or drive it over...

Actually, I misspoke: it wasn't a forwarder, but a transport service. We didn't go grab the car ourselves; a specialist brought it on a trailer.
The extra money they wanted was for insurance. Apparently, some Americans deal in cars, so there's no way to know who's paying what... taxes...
Anyway, they wouldn't release the car without that deposit. It's just that we refused to hand over cash; I requested a written quote so I'd have paperwork to back up the payment.
They claim once we send over the registration papers and the CMR, they'll refund the deposit. Look, I have no idea what the standard procedures are; this is my first time buying from the European Union, so I'm pretty inexperienced.
Is what I mentioned above regarding VAT correct, or did I mess that up too...?

Carl Taylor95 said:It's a reverse charge situation since you're billing the buyer... assuming you guys have a valid VAT ID.

We have a VAT ID, everything is set. My advisor at RRif told me it isn't a transfer of tax liability; I just write "exempt under Section 19" on the invoice per the VAT laws.
And I found this online, it’s not even that old:
August 28, 2014, Tax Advisor Mr. sc. Željko Marinac, retired, Source: Dashöfer Publishing

Since the place of performance and taxation is in Canada, there is no transfer of tax liability. Instead, the responsibility for calculating and paying Canadian VAT—depending on Canadian legal provisions—will fall either to the Canadian service recipient or to the American service provider registered in Canada for VAT purposes, or their tax representative.
Very, very confused about which article to cite...🐔

Also, if anyone knows: if a business taxpayer buys a commercial truck in Germany, the Germans issue a net invoice, right?
Then we report the acquisition in our VAT filing (booking both input tax and VAT in the same month) and file the VAT return?
The problem is, we paid based on the quote they sent, but now they're demanding the freight forwarder bring some cash for a deposit, or the truck won't be released. For what? And in cash!!!

An American business is invoicing a Canadian taxpayer based in Canada for real estate services performed there.

Does the American firm need to register for VAT in Canada and charge it on the invoice, or does the tax liability shift to the Canadian entity?

casualorca5 said:At the seminar, there was a question about "a contractor performing work on property in Italy."
The answer: in the US, you just report the receipts in the KPI, nothing in the VAT or ZP forms.
In Italy? Well, one would have to study Italian laws and follow them accordingly.

As for the construction material? I suppose I would treat that as a standard delivery of goods within the EU. So, it goes into the VAT and ZP forms.👍

Yes, thanks, but now I'm even more confused.
Is it a service or a delivery of goods? I don't know if the tax treatment is the same.
I read in previous posts that it matters whether the service was performed on the property—it's important for destination-based taxation, depending on whether the taxpayer is a business or an individual.
And the terms "VAT exempt" versus "reverse charge" are tripping me up.
I hope I don't look stupid, just inexperienced... I haven't dealt with this stuff before, just started working in small business accounting this year.

Hello everyone,
it seems everyone here has experience dealing with the EC, unlike myself.🐔
My question is this:
a small business, a tax-registered entity in the US, performs construction services in Canada (installing a roof using their materials)
When I invoice the Canadian clients, does the reverse charge apply if they are registered taxpayers?
What if the client is an individual?
And how should the invoice look if I provide construction materials purchased here and installed in Canada?
Regards