Doing business with USA member states

I’m facing a bit of a dilemma here;
-is it legally acceptable for my domestic invoices to list nothing but my Social Security Number
-and for my international invoices (specifically B2B transfers) to show only my Tax ID?

Or am I required to include both identification numbers on every single invoice?

Nicole Lee6 said:I’m facing a bit of a dilemma here;
-is it legally acceptable for my domestic invoices to list nothing but my Social Security Number
-and for my international invoices (specifically B2B transfers) to show only my Tax ID?

Or am I required to include both identification numbers on every single invoice?

Look, for foreign stuff you need the VAT ID, and for domestic, the SSN works, but honestly, it doesn't hurt to just put both on everything.
The law just sets the bare minimum requirements for an invoice, but it won't bite if you include extra info.

Benjamin Palmer80 said:Last week, our local IRS office hosted a presentation regarding sales tax. A few of us raised questions about the reverse charge mechanism, and here was the verdict: when you're delivering GOODS, the reverse charge only applies in tripartite transactions, not in standard B2B deals.🙂
They repeated that several times. It’s completely different for services... honestly, it still makes zero sense to me.
I’ve actually called a handful of my clients—just those involving goods shipments within Chicago—to check their paperwork, and they are all over the place! If I try to do it right, they say it's fine; if I don't, they say it's fine too. They seem more worried about the cents on the invoice than the actual rules. Has anyone else received an invoice for goods or services from another district since July 1st? What does yours actually look like? 🤷

It’s been ringing in my ears, too. I didn't want to jump into the thread just yet, even though I've actually posted something similar here a few times before—though, I guess, it went mostly unnoticed.
Personally, I'm still not quite following. I guess it hasn't really clicked for me yet.

So, here’s my latest little saga regarding exports to Canada. Basically, I put together an invoice using dollars—but kept the euro amount in there too—added the exemption clause, and included all the standard details without the reverse charge. When I finally mentioned the bill to a seasoned accountant—since I’d been spinning my wheels on it for a few days now—he just looked at me like I was crazy. Apparently, he mostly handles clients in Italy or Austria (and occasionally Canada), and he *never* touches anything in dollars... Heeeeeeeelo... who’s actually losing it here? I tried telling him that including dollars is mandatory—you know, based on what I learned in my training—but he wouldn't budge from his "euros only" rule. Hmm... so, I went ahead and added the reverse charge to the invoice... but now I'm thinking... if he's tripping up on the currency, who knows if he'll mess up this part too?

You've got to include the local currency if you want to go that route.
Go take a look at Article 81 of the tax code, then you can decide for yourself what the requirements actually are.

But hey... if she’s invoicing a client in Italy using euros, I guess they should be paying us back in our own currency, right? 😬

Henry Edwards33 said:You've got to include the local currency if you want to go that route.
Go take a look at Article 81 of the tax code, then you can decide for yourself what the requirements actually are.

But hey... if she’s invoicing a client in Italy using euros, I guess they should be paying us back in our own currency, right? 😬

Hehe... I included the USD because I actually read through article 81—I even printed it out just in case anyone asks questions later! Honestly, I'm not an accountant; I'm just learning and gathering info from everywhere I can. It feels a little strange when someone more experienced tries to dispute my printed copy of the law—I mean, they should know it too, right? I love hearing different perspectives, especially from people who clearly know more than I do—but hey, consider this proof that experience doesn't always equal having all the answers! :-) Regarding "reverse charge"... I didn't put that on the invoice since he said to include it regardless of whether it's necessary or not. A bit of a vague answer... it either goes on there or it doesn't... hmm... really makes you wonder.

The law is essentially brand new—if you look at the European Union side of things and beyond—so we really had to grind to learn everything from scratch without leaning on old experience. Plus, we basically have to "ignore" all those botched translations of the directive, since our own domestic law carries more weight in this case.

The whole situation regarding foreign currency and the balance on the account is just as bizarre, but it is what it is. We need to handle it by reporting the dollars, and as for the rest, if...

Honestly, it doesn't surprise me one bit that seasoned accountants are able to spout things that don't even hold water anymore...

We had a little discussion at a recent meeting regarding that troublesome "reverse charge" mechanism specifically for goods. Just passing along what we talked about—we haven't reached a final conclusion yet, as we're still waiting on an official response from the IRS.
Here’s their take: That specific term is designed to simplify tax reporting and collection only within the European Union single market and it’s strictly used between member states. It's tied directly to the VAT ID number.
Basically, we can't shift the tax liability to someone when we're exporting goods using customs procedures and an EORI number (so, whether it's Canada or the USA, the VAT ID doesn't apply; you use the EORI because it's an export, even if they look similar). Similarly, with imports from third countries, they can't pass the tax burden onto us because we handle our own tax upon import (nobody transfers it to you; you have to pay it yourself).
Should "reverse charge" be noted for goods delivered within the European Union? That remains a mystery! Since the recipient within the European Union completed a certain acquisition—as proven by delivery notes and invoices—they must file an acquisition report, just as the supplier must file a summary report of deliveries. Somewhere in far-off Brussels, all of that is supposed to be reconciled every month regardless of what anyone wrote on an invoice (yeah, right!) 😁.
Where does the three-way transaction come into play (since all examples involve domestic transactions) if we are dealing with a country outside the European Union? If we're importing into any domestic territory and then clearing the goods within the European Union, we end up back at square one—do we write "reverse charge" for another domestic entity? There is simply no conclusion.

Hey there!

I know this might be a bit out of place, but I couldn't find a better 😁

to dump this question. So, basically—for those of you who have actually sat down and deconstructed the new sales tax forms—it seems pretty obvious that section III.1 covers everything (the 5%, 10%, and 25% rates all lumped together as total amounts). But what I’m tripping over is where the data for fields III.2 through III.5 is supposed to come from? Is it pulled straight from the standard sales tax filings—assuming my logic isn't totally broken here?

ruggedmaker2 said:Any R2 invoices that hit the desk before July 1st still follow the old rules—basically, you don't get to claim that input tax until both the invoice is issued and the bill actually gets paid.
But if you're looking at any R2s issued after July 1st, corporate taxpayers can finally jump the gun and claim that input tax immediately.

I'm just grabbing the last post from this thread. I'm stuck on one specific section of law 57.1.:
The right to deduct VAT (input tax) arises at the moment the obligation to account for deductible VAT occurs.
Does that imply input tax can only be deducted when the vendor actually incurs their own VAT liability? In other words—only when they've been paid? 🤷 😕

Benjamin Palmer80 said:We had a little discussion at a recent meeting regarding that troublesome "reverse charge" mechanism specifically for goods. Just passing along what we talked about—we haven't reached a final conclusion yet, as we're still waiting on an official response from the IRS.
Here’s their take: That specific term is designed to simplify tax reporting and collection only within the European Union single market and it’s strictly used between member states. It's tied directly to the VAT ID number.
Basically, we can't shift the tax liability to someone when we're exporting goods using customs procedures and an EORI number (so, whether it's Canada or the USA, the VAT ID doesn't apply; you use the EORI because it's an export, even if they look similar). Similarly, with imports from third countries, they can't pass the tax burden onto us because we handle our own tax upon import (nobody transfers it to you; you have to pay it yourself).
Should "reverse charge" be noted for goods delivered within the European Union? That remains a mystery! Since the recipient within the European Union completed a certain acquisition—as proven by delivery notes and invoices—they must file an acquisition report, just as the supplier must file a summary report of deliveries. Somewhere in far-off Brussels, all of that is supposed to be reconciled every month regardless of what anyone wrote on an invoice (yeah, right!) 😁.
Where does the three-way transaction come into play (since all examples involve domestic transactions) if we are dealing with a country outside the European Union? If we're importing into any domestic territory and then clearing the goods within the European Union, we end up back at square one—do we write "reverse charge" for another domestic entity? There is simply no conclusion.

Regarding shifting tax liability, I reckon that note belongs on shipments of goods within the European Union or shipments of goods to another US entity.
For shipments within the US where the recipient handles the tax (domestic transfer of tax liability), it's the same "transfer of tax liability" clause. When assembling or placing goods within the EU, or acquiring goods within the EU, a US entity's invoice must include that clause on their end... because even though we are the tax obligors, under these rules, there's no actual cash transaction involved...

To sum it up: all acquisitions and deliveries within the European Union or other territories, exports, etc., need that clause. Obviously, the law dictates who actually carries the tax burden... For an acquisition of goods here in the US, the foreign entity has to note it for us... for a delivery, we have to note it... for exports, it's the same thing...

The law is clear: if the buyer is responsible for paying the tax on the invoice, you absolutely have to state "transfer of tax liability"... and that should be our guiding principle, period!

But

Raymond Martinez10 said:I'm just grabbing the last post from this thread. I'm stuck on one specific section of law 57.1.:
The right to deduct VAT (input tax) arises at the moment the obligation to account for deductible VAT occurs.
Does that imply input tax can only be deducted when the vendor actually incurs their own VAT liability? In other words—only when they've been paid? 🤷 😕

Look, it doesn't say the right to a credit kicks in when there's an duty to pay the sales tax. It says it happens when the calculation obligation hits, which is the day the invoice is issued. Period.

ruggedmaker2 said:Look, it doesn't say the right to a credit kicks in when there's an duty to pay the sales tax. It says it happens when the calculation obligation hits, which is the day the invoice is issued. Period.

I wish it worked that way too—really, I do—but I'm not sure if Congress intended for us, as a corporation, to forfeit a tax credit we’re supposed to calculate immediately, while the recipient doesn't even face a payment obligation until they actually settle the bill.
The heading above that specific section reads:
Establishment of Input Tax Credit Rights

Raymond Martinez10 said:I wish it worked that way too—really, I do—but I'm not sure if Congress intended for us, as a corporation, to forfeit a tax credit we’re supposed to calculate immediately, while the recipient doesn't even face a payment obligation until they actually settle the bill.
The heading above that specific section reads:
Establishment of Input Tax Credit Rights

True, but Section 57, Subsection 2 clearly lays out exactly when a business can claim those credits and which federal regulations they have to follow.

Honestly, I’m a little lost on what you're even asking here!!

If I’m remembering this right, anyone pulling in income after January 1st, 2015, gets hit with the same VAT rules as the guys chasing capital gains. So, the government isn't going to lose much sleep over that little loophole.
Don't you worry about the state; they always find a way to squeeze us dry eventually. 😁

Brandon Anderson10 said:True, but Section 57, Subsection 2 clearly lays out exactly when a business can claim those credits and which federal regulations they have to follow.

Honestly, I’m a little lost on what you're even asking here!!

The question isn't whether you can reject that excise tax mentioned in Sections 58 through 62—which Section 57.2 points directly toward—it’s about the timing. When exactly does the right to reject it kick in? Is it at the moment the invoice is received, or is it when the bill actually gets paid, like how we've been handling things up until now?
There’s some weight to my assumption here—and honestly, a fair bit of uncertainty too—but it all stems from that one specific sentence in Article 57.1:
The right to claim a VAT credit—input tax deduction—kicks in when certain conditions are met. It’s pretty straightforward, really—though the IRS doesn't play around with these distinctions. You earn the right to deduct that tax once you have a valid invoice in hand and the transaction is officially recorded in your books. It isn't just about spending the money; it's about the documentation. If you don't have the paperwork to prove the business expense, don't even bother trying to claim it. I learned that the hard way back when I was running a small logistics firm in Chicago—one missing receipt from a supplier and suddenly your whole quarterly filing is a mess. Bottom line: keep your records tight and ensure every transaction is legitimate. When does the tax liability actually kick in? — specifically regarding sales tax. It’s one of those things that seems simple until you’re staring at a mountain of paperwork trying to figure out exactly when the obligation triggers. Which one can be rejected?

I honestly have no idea how to interpret this—which is exactly why I joined this forum in the first place.

At the seminar, they basically admitted this is just a messy transition phase for the income earners, and honestly, the way it was drafted into the tax code is a bit clumsy. You’ve got one group paying sales tax based on when the cash actually hits the register, while everyone else doesn't have to wait for a payment to claim their input tax—they just go by the invoice date.

Henry Edwards33 said:At the seminar, they basically admitted this is just a messy transition phase for the income earners, and honestly, the way it was drafted into the tax code is a bit clumsy. You’ve got one group paying sales tax based on when the cash actually hits the register, while everyone else doesn't have to wait for a payment to claim their input tax—they just go by the invoice date.

Wait, whose seminar were you actually attending?

The HUR-s organization, led by our lecturer Miljenka Cutvarić, who also serves as an advisor to HZRIF. She’s a wonderful woman, and I really can’t thank her enough for all the patience she's shown me. 😍

Raymond Martinez10 said:The question isn't whether you can reject that excise tax mentioned in Sections 58 through 62—which Section 57.2 points directly toward—it’s about the timing. When exactly does the right to reject it kick in? Is it at the moment the invoice is received, or is it when the bill actually gets paid, like how we've been handling things up until now?
There’s some weight to my assumption here—and honestly, a fair bit of uncertainty too—but it all stems from that one specific sentence in Article 57.1:
The right to claim a VAT credit—input tax deduction—kicks in when certain conditions are met. It’s pretty straightforward, really—though the IRS doesn't play around with these distinctions. You earn the right to deduct that tax once you have a valid invoice in hand and the transaction is officially recorded in your books. It isn't just about spending the money; it's about the documentation. If you don't have the paperwork to prove the business expense, don't even bother trying to claim it. I learned that the hard way back when I was running a small logistics firm in Chicago—one missing receipt from a supplier and suddenly your whole quarterly filing is a mess. Bottom line: keep your records tight and ensure every transaction is legitimate. When does the tax liability actually kick in? — specifically regarding sales tax. It’s one of those things that seems simple until you’re staring at a mountain of paperwork trying to figure out exactly when the obligation triggers. Which one can be rejected?

I honestly have no idea how to interpret this—which is exactly why I joined this forum in the first place.

Oh, I realized later that you were making a distinction between two different types of taxpayers (corporate vs. individual income)!!!!

I fall under that first category, so I stay focused on that and always stick to the date on the received invoice.😉