Posts by mistyseal51

Regarding those posts from earlier...

I run a small business under the simplified tax regime. I just registered for a VAT ID, and I’ll be issuing my first new invoice shortly. I have a few questions.

1. My invoices currently use the "reverse charge" method. Should I continue to include the note regarding exemption under the Value Added Tax Act?

2. Is it necessary to show a 0% VAT rate on the invoice, and am I even permitted to do that since I'm not technically part of the VAT system?

3. Aside from filing Form W-2, will I need to submit any additional tax filings?

Thanks.

Nicole Wells38 said:As an accountant, my take is that you really should be requesting a Sales Tax ID since you're dealing with transactions involving European Union countries. However, since you're exempt from calculating and paying Sales Tax under Section 90, you won't actually need an accountant until you hit the threshold$49833 where you transition into small business status, at which point you'll definitely need one and will no longer qualify for simple cash-basis reporting.

From what I gather, registering for Sales Tax requires being set up on the IRS portal. Getting access means paying for a digital certificate. I’ve heard they’ve been having some technical glitches with their servers lately, so I’m not entirely sure how much of a headache that process is going to be right now.

Or am I totally off base here and there's just a simple way to handle this?

Lisa Newman34 said:I’m facing the exact same dilemma. From what I can gather, even those on the simplified tax plan should be requesting a VAT ID and filing the necessary paperwork with the IRS for the month the service was provided to a company within the USA:
http://www.irs.gov/VAT-regulations/...registration.aspx#5
Did you bother asking the IRS directly? What was their take?

My issue is that my client in Ireland isn't interested in seeing my VAT number at all. 🙂 They informed me that since we're using the reverse charge mechanism, they will handle the VAT payments to the Irish authorities themselves. Apparently, they don't require my VAT ID and don't even want me to send them formal invoices. They just pay the agreed amount every time, but they refuse to look at an invoice. They mentioned I could send one if American law strictly requires it, but they'll likely just ignore it anyway.

I assume they still have to submit some sort of tax form to the Irish IRS that lists the VAT numbers of all the companies providing them services. I'm wondering if I'm somehow exposed to risk here—could I get in trouble if my client fails to list my VAT number in their tax reports and doesn't pay the VAT?

AICPA consultant: No
Tax Associate: No
Accountant #1: I have no idea
Accountant #2: Maybe
RRIF: Yes
I managed to get a phone number from the IRS, but nobody ever picked up. Instead of calling again, I just sent an inquiry through their online contact form. Now, I'm just waiting on a response.

If you take a closer look at that FAQ you linked, that last sentence feels off. What does it have to do with Sales Tax not being charged if there's a transfer of tax liability?

You might want to check out sections 17, 77, and 90 of the Sales Tax code. Based on those, I can't say for certain which way it goes either.

I'm still waiting on that email from the IRS. If they tell me it's required, I'll grab the ID and use it. But honestly, it’s not practical because I'd end up needing to hire a professional bookkeeping service.

Greetings to everyone.

I run a small business under a simplified tax structure (not registered for sales tax). I started this year, focusing primarily on software programming. So far, I’ve sent out several invoices that have already been settled. My clients are based in India, the United Kingdom, and Estonia. However, following advice from my local Chamber of Commerce, I didn't register for a sales tax ID, nor have I listed one on my invoices. No one has requested that number from me yet.

Reading through some of the posts here, it seems like I might be doing things incorrectly. Is that actually the case? I was under the impression that registering for a tax ID and filing those specific reports only applied when purchasing from companies within the USA. What should I do if I've been handling this the wrong way?

Naturally, I plan to contact the IRS, but I would love to hear some opinions alongside theirs.