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Hey guys, thanks for all the input—you really helped me clear my head (I think yesterday’s heatwave just turned my brain to mush 🙄). Anyway, we're looking at a tax liability transfer under Section 17, Paragraph 1 here. We’re heading over to Canada to service a fire suppression system, which means the service location is technically the recipient's headquarters. That Section 45, Paragraph 1, Point 4 stuff? That's strictly for export-related shipping services. Thanks again, everyone! 🙂
Why the massive discrepancy?
The official European Union site says—and I’m quoting here:
"Exports to non-European Union countries will remain VAT-exempt. The exemption process stays exactly as it is now, meaning there are no changes regarding VAT taxation for taxpayers exporting to third countries. Taxpayers registered for VAT will continue to report export deliveries in their VAT returns just like they do currently."
But then you look at Opinion.com, and they’re saying: "If goods are shipped from the US to a third country (like Mexico), no VAT is charged—it's an export exemption."
So, I’m billing for service exports to Canada using USD, but I’m listing the conversion to Euros based on the Federal Reserve mid-market rate. I also throw in this little disclaimer: "VAT is not charged per the provisions of Section 45, Subsection 4 of the tax code."
Is that actually legit? Do I need to add any other fine print? And am I required to include their business tax ID on there?