Posts by Ethan Bailey18

Betty King7 said:Does anyone actually need to submit the CMR shipping manifest?

Precisely. You have to fax or email the invoice to the freight forwarder for Intrastat reporting purposes.

👍

[QUOTE=loolla;54561965]Since we’re talking about a vehicle (a tangible asset) rather than services, I found one that fits perfectly. Wouldn't that bypass the reverse charge requirement?[/QUOTE
Just follow Darsey's lead... include a note regarding the reverse charge under Section 41 of our tax code.[/QUOTE]

Ethan Bailey18 said:Hey everyone.
I need some advice.
I’m invoicing for tool repairs on equipment owned by a firm based in Canada.
They leased it to us because we manufacture products for them.
The agreement is that they cover all maintenance costs.
The tools are being repaired here in California and stay here in California, but the invoice goes to the Canadian company.
Do I need to charge sales tax on this?
Since we’re the ones performing the service... right? Or am I missing something?
Also, how does this look on my accounting ledger—do I list the gross amount including tax, and does it even belong in the ledger at all?
Help.

If anyone needs a refresher... just look at the fundamental principles of Section 17 regarding chargeback rules.😛

Hey everyone.
I need some advice.
I’m invoicing for tool repairs on equipment owned by a firm based in Canada.
They leased it to us because we manufacture products for them.
The agreement is that they cover all maintenance costs.
The tools are being repaired here in California and stay here in California, but the invoice goes to the Canadian company.
Do I need to charge sales tax on this?
Since we’re the ones performing the service... right? Or am I missing something?
Also, how does this look on my accounting ledger—do I list the gross amount including tax, and does it even belong in the ledger at all?
Help.

Jonathan Garcia said:There aren't any special notes here, just something about the warranty period. Honestly, I've never run into anything like this before.

Regardless of what goods you're moving... the Invoice needs a clear note explaining why tax wasn't applied. Without that, the document isn't valid for bookkeeping purposes.

ruggedmaker2 said:Not always. It all depends on what the specific country's laws say if we're talking about property.
If you're dealing with real estate services, the tax is handled where the property actually sits. There's a huge difference if that property is in Austria, Poland, or the USA... because every country sets its own rules for that stuff.
But that's only if it's strictly real estate. If it isn't—say, it's for some heavy machinery or something else entirely—then we're looking at a reverse charge situation (I can't remember the exact code off the top of my head).

With this kind of stuff, we always ask for a written opinion from the IRS just so we have cover, and then we play by those rules.
Honestly, if I were you, I'd take the order details or the contract straight to the IRS first to see what they say.

And if the service is provided to a tax entity (and from what I gather, that firm in Austria is a registered taxpayer), my understanding is that the recipient of the service handles the sales tax calculation in this scenario.
In my experience, an Italian vendor once issued a reverse charge invoice because the transport service was completed on my end... so I made that connection.
On another note... here I go again... regarding a ticket for a trade show in Austria... do I just book it to account 221 and 4 using the exchange rate from the date of issuance? 🤦 🤦🤦
I think I'm losing the thread here.🙂

ruggedmaker2 said:Look, you really have to nail down whether you're performing services on real estate. You need to decide if that disassembly and installation—assuming you're just providing the labor and not selling them the actual components—is being done on something that qualifies as real property under the law.
If it's tied to real estate, then it falls under those specific exemptions in the US tax code. In that case, the place of taxation is wherever the property itself is sitting. From there, you'll have to dig into their local state laws, because let's be honest, tax rules aren't exactly identical everywhere.

Does it really not matter which principle applies here? Whether it's treated as B2B based on the recipient's location or as
a service tied to real estate... either way, no US sales tax should be charged on the invoice.🤔

Thomas Fisher6 said:Could use some help here, if anyone knows their stuff
I’m pretty new to all this and could really use a hand
I have an invoice ready for a client in Austria for a shipment of goods—specifically elevators. On the invoice, I need to cite the specific section of the tax code regarding VAT exemptions for intra-USA transfers. This should be reported in the VAT return under intra-USA goods deliveries and, naturally, on my monthly tax filing.
The second invoice is for that same Austrian firm, but it's for services: basically a turnkey mechanical disassembly of the old setup and installation of new components. That’s where I’m stuck. Which legal code should I list? And when filling out the VAT return, does this go under non-taxable transactions (item 6) for the supply of goods/services within the USA, and how does it look on my monthly filing?
Then there’s one more case: selling an electric motor to Mexico plus the shipping costs. I’m not sure which article to cite since my previous invoices didn't specify anything, even though it gets logged in the VAT return under column 9 for export deliveries.

For the service... check section I.4 of the tax form; it goes in the tax report, but categorize it under services rather than goods.
The invoice for Mexico is an export... handle it the same way as before joining the USA; it goes under point I.9 of the tax form.
I believe it falls under Article 45, paragraph 1, but double-check that.

Ethan Bailey18 said:Need some guidance here... I'm stuck on a bit of a dilemma.
The director was traveling for business and I've got a restaurant receipt from Austria.
It was a business lunch paid via Amex.
Accounting entries: 221 P
463 d 70% non-deductible
4635 d 30% deductible.
221 D
231 P (credit card liability)
Now, do I report this on the Sales Tax return as an imported service, or is it taxable based on the place of performance?
My gut says I don't have to, but I could use some confirmation.
There aren't any specific tax notes mentioned on the receipt itself.

ruggedmaker2?

Need some guidance here... I'm stuck on a bit of a dilemma.
The director was traveling for business and I've got a restaurant receipt from Austria.
It was a business lunch paid via Amex.
Accounting entries: 221 P
463 d 70% non-deductible
4635 d 30% deductible.
221 D
231 P (credit card liability)
Now, do I report this on the Sales Tax return as an imported service, or is it taxable based on the place of performance?
My gut says I don't have to, but I could use some confirmation.
There aren't any specific tax notes mentioned on the receipt itself.

Douglas Nguyen30 said:The goods were officially transferred on January 31st, we have the shipping documents in hand, but the invoice isn't dated until February 6th, 2015. Should I record this transaction in January using the exchange rate from the end of the month—meaning it hits the January VAT return—or wait until February 5th for the February filing?
Thanks so much!

I ran into a similar situation once. I actually called my contact over in Austria to see which month she filed her paperwork in, just to make sure my sales tax filings matched up perfectly with her FBI records.☕

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.

I honestly thought I was an expert in this field... but if I'm already a registered taxpayer within the system, why on earth would I need to register all over again?

🤔

ruggedmaker2 said:Honestly, I’ve got a feeling someone might actually need to register for VAT in another EU member state here. (It really just depends on what the specific rules are under Canadian VAT law).
But look, I'm not 100% certain on this, and I definitely don't want to cause any unnecessary headaches or panic 😁 for everyone involved, so my best advice is to go talk to a tax pro at the IRS or a specialized consultant.

They really need to keep in mind that VAT laws across the European Union aren't some universal, identical thing. They vary quite a bit from one country to the next. You seriously need to do your homework and ask those questions before jumping in headfirst.

If everyone is already a taxpayer... they have their own VAT numbers, and the database confirms it... so why bother with another registration?
Registration is mandatory if you hit certain earning or delivery thresholds (per relevant sections of the US tax code), provided YOU aren't already registered as a taxpayer.🤔

Carol Price4 said:I didn't take it that way at first... I just re-read it, but it’s still pretty vague... it says the goods were delivered to Canada, but it doesn't specify who actually sent them...

It could be some kind of "fake" three-way deal or maybe just a continuous shipment... there just isn't enough detail here to make any real assumptions...

I'm with ruggedmaker2 on this one—it's definitely best to just reach out to a VAT law expert...

nezz..but a sham triangular transaction only applies if one of the parties is outside the European Union🤔

Carol Price4 said:Here’s another scenario—I don't think this counts as a three-way deal if I'm reading this right. It looks more like four different parties involved here:

A Spanish company ==> sells to American Buyer 1 ==> who sells to American Buyer 2 ==> who finally sells to a Canadian buyer.

1) American Buyer 1 acquires the goods, files their sales tax return / the Spanish company files their customs paperwork.

2) American Buyer 1 sells to American Buyer 2—standard sales tax applies.

3) American Buyer 2 ships to the Canadian buyer, files customs paperwork via reverse charge / the Canadian buyer acquires the goods and handles the sales tax.

There's logic there... but I have questions. How can American A 1 acquire goods that never actually entered US territory? And how does American A 2 claim a delivery for items that never even left the US?🤔🤔

Carol Price4 said:Here’s another scenario—I don't think this counts as a three-way deal if I'm reading this right. It looks more like four different parties involved here:

A Spanish company ==> sells to American Buyer 1 ==> who sells to American Buyer 2 ==> who finally sells to a Canadian buyer.

1) American Buyer 1 acquires the goods, files their sales tax return / the Spanish company files their customs paperwork.

2) American Buyer 1 sells to American Buyer 2—standard sales tax applies.

3) American Buyer 2 ships to the Canadian buyer, files customs paperwork via reverse charge / the Canadian buyer acquires the goods and handles the sales tax.

There's logic there... but how exactly can American A 1 acquire goods that never actually entered the US just to sell them if they haven't left the US?🤔🤔

Austin Brown4 said:We are looking at a rather convoluted acquisition process here. Let’s break down the first scenario: an American company is purchasing raw materials from a supplier based in the US. The American supplier issues an invoice without sales tax, yet the goods are actually being delivered directly to a different firm located within the US. So, the physical shipment stays within the US borders. Then there is the second case: an American company buys goods from a Spanish supplier and receives an invoice without sales tax from the Spaniard, but the actual delivery takes place in the US. This same merchandise is then invoiced to another company back in America, while the original supplier bills the American entity. In all these moving parts, what is the actual status regarding sales tax?

First off, the Mexican supplier should have charged sales tax because the goods didn't properly exit Mexican territory, which is a prerequisite for transferring the tax liability.
Second, we are looking at a three-way transaction (using simplified procedures for transactions involving three USA member states). In this scenario, the initial supplier in Spain doesn't charge tax because the goods leave their country and ownership transfers to another taxpayer.
The first buyer (the US company) issues an invoice with sales tax to a US taxpayer, who then claims it as an input credit here in the States.
When they invoice the Mexican entity, they don't charge tax, but per the regulations, the invoice MUST include specific details under Section 79, Article 1.😛They need to cite the relevant provisions of the Directive and include a note regarding the transfer of tax liability, including the tax ID used for the acquisition and subsequent delivery, the recipient's tax ID in Mexico, and a clear statement that this is a three-way transaction. On the tax return, this is reported under section I.3 for intra-USA deliveries, and a supplemental filing is mandatory.
The Mexican party is responsible for calculating and remitting the sales tax.👍

Henry Edwards33 said:Actually, those are specific records that need to be tracked in their own numerical sequences. They should physically be kept separate from your regular sales logs.

By the end of the month, everything shows up in that month's master sales book; they're just categorized into different columns.

How you handle this in your software really depends on what kind of system you're using. Personally, I maintain several specialized sub-ledgers where I record each specific type of transaction. For example, I have separate books for domestic sales, import tax calculations, and services provided by out-of-state vendors.

Thanks, Henry. My developer can't seem to make that happen, so I end up putting everything into one ledger just to ensure the totals land in the right column at month-end. To compensate, I’ve built my own Excel spreadsheets that mirror the official regulatory formats for special records. I track everything there separately and then just attach that printout to the standard sales tax ledger at the end of the month.
Hopefully, the IRS won't breathe down my neck over this. The numbering sequence is unique and everything is physically separated; they just happen to be visible on the standard sales tax report.🤔

Henry Edwards33 said:But that’s exactly what it is—a specific record of incoming invoices for every category required by law. I don't see where the confusion lies. 🤷

We aren't talking about one giant master ledger; we're talking about a specific set of records for X or Y, which already exists.

But I enter all those purchases into the standard purchase journal following my auditor's instructions. At the end of the month, the only thing used for the sales tax return is a single printout from that journal; everything else is just supplemental documentation.

Drew Rogers6 said:In Synesis? It exists, it absolutely exists.
The URA calculation for VAT on imports and the
URA for goods acquired from the USA

Software can be programmed to do just about anything, but the regulations strictly mandate using a special record.