Carol Price4 said:2. Tax Base for Goods Acquired within the European Union Section 34. (1) The tax base for acquiring goods within the European Union is determined based on Section 33 of the Domestic delivery law. In cases involving the acquisition of goods under Section 9, paragraphs 3 and 4 of this Law, the tax base shall be the purchase price of said or similar goods—or, if that price isn't known, the total costs established at the time of delivery. (2) Included in the tax base as described in paragraph 1 of this section are any excise taxes that the acquirer is required to pay or has already paid for goods subject to such taxes within the European Union. (3) If the acquirer manages to get a refund for excise taxes paid in the member state where the shipment or transport began after the acquisition has taken place, the tax base for the acquisition will be reduced accordingly.
so what amount goes on the sales tax form if, say, I'm buying coffee from the EU... do I put the supplier's invoice total including tax, or is it the invoice amount + tax + special tax?
that’s probably just because of that new Java update... honestly, just ditch that version and grab something like Java 7 update 20 instead or you could try pulling the card out and popping it back in to get it signed—but then you'd have to do that whole dance every single time you need a signature
Man, you gotta be kidding me, that makes zero sense 🤷
If the customer or service recipient is the one on the hook for the sales tax, the vendor has to mark the invoice with "reverse charge" or just write out "tax liability transfer"
So if I'm shipping goods to a business in the USA, they’re the ones responsible for the tax—per Section 79, Article 7, I’ve gotta put "reverse charge" on there...
Same thing happened when I was bringing in supplies from Italy lately—both my suppliers labeled everything as reverse charge on their invoices
For now, I’m just gonna stick with "reverse charge" for all my shipments to the USA... it doesn't say anywhere that I can't include that note—plus, Section 79 totally has my back 🙂 (7) When the recipient is responsible for paying the sales tax, the provider has to note "reverse charge" or the English term "reverse charge" on the invoice
Since I was digging into service exports to third countries a bit more 😁 I stumbled upon this too
Under regulation 282/2011, article 18, section 3, unless they know otherwise, a service provider can treat a recipient based outside the USA as a tax payer if: a) They get a certificate from the relevant tax authority in the recipient's home country—the kind of thing issued when someone asks for a VAT refund under directive 85/560 / EEC (the so-called thirteenth directive) in a USA state. b) The recipient doesn't have that certificate, but the provider has their tax ID or some similar registration number used in their home country to identify businesses—basically any proof they're a tax payer—as long as the provider performs a reasonable check to make sure the info is legit, using standard business security measures like identity verification or payment checks. I'm not totally sure about the "payment checks" part, though—pretty sure that's just a weird translation quirk... That bolded part worries me, because around here, "being reasonable" during an audit isn't really a thing...
ruggedmaker2 said:First off, you really need to pin down exactly what kind of service you're actually performing. It’s a totally different ballgame whether you’re doing real estate consulting, legal representation, or IT work—plus, some services are exempt from tax altogether. You’ve got to dig into the tax code and the regulations to see where the "place of taxation" actually falls for your specific situation.
Take a look at Article 41 of the regulations; it breaks down what gets added to the tax base for goods or services. Check that out specifically based on what you're actually invoicing them for.
If they’re legitimate businesses, I’m pretty sure you can skip the sales tax using the reverse charge method. They’ll handle the tax on their end over there. If you’re doing this constantly and pulling in decent money, my advice? Don't play games. Get a formal written opinion from the Internal Revenue Service in Washington, D.C. so you can sleep at night knowing you're 100% covered. Just grab the statement they sent you, draft a quick letter, and mail an inquiry to their office at 1600 Pennsylvania Avenue NW. Word is, they get back to you pretty fast.
The service is medical research, so we're talking monthly invoices and some pretty significant revenue... My main worry is that confirmation from third countries—especially Americans—since that all falls under B2B services... looks like the smartest move would be to send that letter just to be absolutely certain... Thanks, Daisy!
Patrick Peterson49 said:Do I need to charge sales tax on services provided to a business based in the States? In my head, this should be a B2B deal, but they don't follow the EU system and don't have a VAT number. I've got proof they're legit businesses, but when I called the IRS and the Treasury, they basically just gave me the runaround—they couldn't even tell me what the rule is... 😁 For example, when I worked with a client from Mexico, their local Police Department provided official documentation, so there was zero issue there. But these guys? All they gave me was a note saying they pay US taxes...
Here’s what they sent over: The USA does not have VAT, as per EU legislation. However _______ is registered in the US for corporate taxes.
ruggedmaker2, what do you think about this... do I charge tax or not when dealing with Americans? 🤷 Oh, one more thing... while doing this work, I run into expenses—travel, phone bills, gas, translations, copies, etc.—which I then invoice back to the US and other places. Should those be taxed too, or would that just count as part of the service under that B2B rule? Personally, I'm thinking no tax should be added, it should just follow the service line...
Ethan Bailey18 said:Has anyone actually tracked down a specific section in the Tax Code or the Regulations that clarifies whether the reverse charge note needs to be added to an invoice under Article 41.1.a ? Or does that note strictly apply to transactions covered by Article 10 (triangular trade)?
Check out Section 79, subsection 7 of the Tax Code
(7) If the recipient is the one on the hook for the sales tax, the supplier has to include the phrase "reverse charge" or the English equivalent on the invoice.
Do I need to charge sales tax on services provided to a business based in the States? In my head, this should be a B2B deal, but they don't follow the EU system and don't have a VAT number. I've got proof they're legit businesses, but when I called the IRS and the Treasury, they basically just gave me the runaround—they couldn't even tell me what the rule is... 😁 For example, when I worked with a client from Mexico, their local Police Department provided official documentation, so there was zero issue there. But these guys? All they gave me was a note saying they pay US taxes...
Here’s what they sent over: The USA does not have VAT, as per EU legislation. However _______ is registered in the US for corporate taxes.
Honestly, these records are tripping me up a bit, but I’ve still got some breathing room before it actually matters 😁 Under section 164, it says everything needs to be in one single ledger, but then section 163 mentions keeping separate records... so my take is we need one master ledger where everything is displayed, plus extra sub-records for each specific group 🙂That's how I'm reading it anyway—and like I said, I've got time, so I haven't been stressing too much about it just yet... My only real headache is that my programmer is waiting on me to explain the whole thing so he can build it... it's kind of ridiculous—it's like if I were doing someone's accounting and then asked them how to actually book the entries, and then tried to charge them for it on top of that 😁
Richard Howard55, so you're saying there aren't separate import/export books anymore, even for third-party countries or just for trade between USA members?
Could a good soul please double-check what I've put together here...
Shipping documents for international orders CRM Packing list Delivery note and stuff like that Customer confirmation of receipt (like Field 24 in the CRM)
Reverse charge for construction services and recycled waste sales: The buyer pays Sales Tax if they are a registered taxpayer—per Section 75, Subsection 3 of the Sales Tax Law and Section 152 of the Regulations. The invoice needs to mention the reverse charge + Section 75, Subsection 3 of the Sales Tax Law.
EORI numbers are only needed by those importing from third countries.
Main rule for acquiring goods: If a taxpayer supplies goods to another taxpayer, it's taxed in the state where the goods are delivered. If goods are sold to individuals or small taxpayers, they're taxed in the seller's state. Exceptions: new vehicles—destination state Duty-free goods—destination state Distance selling—taxable in the origin state until the delivery threshold is hit (in the US $90000)
Shipping goods from the US to third countries. Exempt from Sales Tax per Section 45, Subsection 1, Item 1 of the Sales Tax Law + proof of shipment like JCD, shipping docs, etc. The invoice should state "reverse charge" and exempt under Section 45, Subsection 1, Item 1 of the Sales Tax Law.
Shipping goods from the US to other USA states. Exempt from Sales Tax per Section 41, Subsection 1, Item a of the Sales Tax Law + reverse charge + proof of shipment from the US + verifying the recipient's VAT number via the FAA system. If the goods are moved by the buyer or someone else on their behalf, the seller must have a written statement regarding the shipment or transport to another state signed by the person who handled the transport. Per Section 170 of the Regulations. (3) That written statement for the shipment or transport mentioned in Subsection 2 must include: a) the seller's full name (business name), b) the invoice number and date of issue for the supplied goods, c) the buyer's name (business name) and tax ID, d) the registration plate of the vehicle used to ship or transport the goods, e) the destination location in the other state, and f) a note stating the buyer is ready to provide any info regarding the destination upon request by the IRS.
The invoice needs to specify "reverse charge" and exemption per Section 41, Subsection 1, Item a of the Sales Tax Law.
Service deliveries: B2C – reverse charge on the invoice per Section 17, Subsection 1 of the Sales Tax Law. Same applies to importing services. B2C – taxable based on the service recipient's business location per Section 17, Subsection 2 of the Sales Tax Law. If a service provider from another state handles transport for an American entrepreneur, the American entrepreneur must charge American Sales Tax.
Any taxpayer supplying goods to another state must keep records of their annual turnover, specifically broken down by each destination state. Per Section 169 of the Regulations.
What happens with the import/export audit books? 🤷 I'm assuming they stay the same for imports and exports from third countries... I don't know much about shipments within the USA. All I found was this: Obligation to keep records of goods shipped to other states: A taxpayer must maintain records of goods they shipped, transported, or that were shipped/transported on their behalf outside of their home state but within the USA for the purpose of valuation services or temporary use of those goods under Section 7, Subsection 6, points d), e), and f) of this Law. And this: (3) A taxpayer must keep detailed records that allow for the identification of goods delivered from another state by a taxpayer registered for Sales Tax in that state, or by another person on their behalf, which are... used for services involving the appraisal of those goods or work done on them.
we're talking about temporary shipments to or from the USA—check out Articles 170 and 171 in the Regulations...
Brenda Chase3 said:When you provide a service to a taxpayer who isn't based here in the States, that service isn't taxed domestically because the service is considered to take place where the recipient is located (for instance, over in Vienna), and that is when the tax liability transfer occurs via the reverse charge mechanism. To verify that a client in another country is acting as a registered taxpayer, the American service provider needs to have that client's specific VAT identification number on file. That is when you include the "tax liability transfer" or "reverse charge" clause on the invoice. This transfer simplifies the whole process by allowing the service provider to avoid having to register as a tax entity in the foreign country where the service was performed. If the provider fails to obtain a valid tax ID, the transaction is treated as being provided to a final consumer, which means the service becomes subject to taxation right here in America. Man, there is certainly a lot to wrap your head around here. I am just thankful to Bog for this forum so we can bounce these ideas off each other and clear things up. 🙂
So, what happens when you're providing services to someone outside the European Union—like over in the States?... wondering how that works... Does this follow the standard American sales tax rules, or is it handled like those transactions with the European Union?...
Richard Howard55 said:The answer is: if you’re adding a fringe benefit calculation to the salary—something that applies to that specific month and repeats consistently every single month throughout the year (like a 1% imputed income for a company car)—then sure, it can all go on one list. But if it's just some random fringe benefit popping up out of nowhere, once now and then whenever... I guess that can't go on the same list.
Sweet, looks like I don't have to change a thing... 😁 Thanks for the heads up!
Richard Howard55 said:So, I attended an IMF seminar today. I was hoping they might actually drop some knowledge regarding the changes to interest rates, or maybe offer more clarity on that much-hyped form that’s supposedly going to replace everything else. In the end? Nothing. Absolutely nothing. I really needed to hear how payroll calculations will shift starting this coming January, and if there are any hidden "gotchas" lurking in those new regulations once they officially go live. Specifically—and I might be misinterpreting the updates to the contribution laws—it looks like I won't be able to list non-monetary compensation on the same pay stub as regular salary anymore. I need a definitive answer on that before the end of January.
(I suppose I'm somewhat satisfied, though. At least I figured out how to code the invoices for non-cash benefits for tax reporting purposes).
Hey, did you ever get an answer on that bolded part??? They didn't have any info at the NPR seminar today about when that new form is coming either, though word is it might even be retroactive... 🤣
The tip about how to code those non-cash pay invoices was actually pretty smart though... I was thinking about setting up a separate cash drawer or a different business unit just so it doesn't get all tangled up with my other accounts...