Doing business with USA member states

I need some help figuring out this EORI number situation. Who actually needs one? For example, if a small business picks up goods coming in from Mexico, do they have to have an EORI number? Basically, does every single individual or company importing stuff from European Union countries need to be registered?

Thanks.

Arthur Bishop6 said:I need some help figuring out this EORI number situation. Who actually needs one? For example, if a small business picks up goods coming in from Mexico, do they have to have an EORI number? Basically, does every single individual or company importing stuff from European Union countries need to be registered?

Thanks.

I already gave you an answer over in the customs thread, but fine, I'll repeat myself here.
If you're just handling acquisitions or deliveries within the European Union, you don't need an EORI number—you'd likely just need a VAT ID.

Thanks.
I posted the question in two different spots just to be safe. It honestly blows my mind that the guys at Customs gave me such wrong information.

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?

If you’re providing services to a partner based in a third country, you need to include a specific note stating that the tax liability is being transferred under Section 17(1) of the VAT Act 🤔. Just keep in mind, you absolutely have to have documentation proving they are actually registered as a tax entity in Canada; otherwise, there is no transfer, and you'll be stuck calculating the VAT yourself

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."

I need some help here. A sole proprietorship is acquiring goods from the USA in July, while simultaneously receiving the invoice. The VAT liability arises in July. Since the invoice hasn't been paid yet, is there still a right to claim input tax?
According to Article 133 of the regulations, it seems they do, as there's no mention of a requirement to have actually paid the bill. 🙂

ambercobra21 said: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."

You're spot on, Arthur Bishop6. I'm dealing with a case like this right now and it works exactly how you described. This is an export to a third country, and the tax liability shifts to that third country if the buyer is located there. Since the buyer is American and the seller is exporting to a third country, the exemption applies. It’s exempt under Section 45, subsection 1, point 4 of the Value Added Tax Act.

Look, I just re-read this and I think we’re talking about two different things entirely. I’m talking about moving physical goods for export. But, if you've got a client over in Mexico and you're exporting services, then yeah, the tax liability shifts—and that buyer better be able to prove they're actually registered for sales tax.

Arthur Bishop6 said:Look, I just re-read this and I think we’re talking about two different things entirely. I’m talking about moving physical goods for export. But, if you've got a client over in Mexico and you're exporting services, then yeah, the tax liability shifts—and that buyer better be able to prove they're actually registered for sales tax.

I finally realized you were asking about services, not physical goods. 🤷 When dealing with services, there isn't much of a distinction whether you're providing them to someone within the UN or someone in a third country; as long as you have documentation proving the recipient is a registered tax entity in their home country, it falls under the "reverse charge" mechanism per Section 17.

ambercobra21 said: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?

Look, you asked about services, not goods. That’s why I answered the way I did. The rules for service exports are entirely separate from the rules governing the export of physical merchandise.

Does anyone happen to know which specific section of the Emancipation Proclamation we need to cite on an invoice when we're charging interest on late payments? I’m leaning towards Section 40, but I wouldn't bet on it myself.

Arthur Bishop6 said:Look, I just re-read this and I think we’re talking about two different things entirely. I’m talking about moving physical goods for export. But, if you've got a client over in Mexico and you're exporting services, then yeah, the tax liability shifts—and that buyer better be able to prove they're actually registered for sales tax.

The tax liability doesn't shift for customers located in third countries. It's simple—old lady over there was quoting incorrectly; when dealing with customers in third countries, nothing changes. Everything stays exactly as it was before. The only difference is the specific section mentioned in the footnotes regarding US tax code.

Raymond Martinez10 said:The tax liability doesn't shift for customers located in third countries. It's simple—old lady over there was quoting incorrectly; when dealing with customers in third countries, nothing changes. Everything stays exactly as it was before. The only difference is the specific section mentioned in the footnotes regarding US tax code.

If we are strictly talking about services (B2B service provision), then it applies.

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! 🙂

ambercobra21 said: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! 🙂

Don't forget to grab some kind of proof from them showing they are actual tax entities in Canada. Since you're handling the reverse charge, you need documented proof that they are registered taxpayers; you can't just check them against an IRS database because they aren't in the USA. Whether they decide to charge tax on their end is none of your business.

I don't know what to tell you. Sometimes things just happen, and there isn't much anyone can do about it. It’s just how the world works. Life's messy like that. ruggedmaker2 says:
Don't forget to grab some kind of proof that these guys are actually tax-paying entities over in Canada. Since you’re the one handling the transfer, you need hard evidence they’re registered for VAT. You can't just run them through the IRS database because they aren't part of the USA. Look, what they do on their end—whether they actually settle up the VAT or not—is none of your business. Just cover your own tracks.

Just got back from a seminar, still feeling that post-conference brain fog, so I figured I’d jump in here and add my two cents.
Like ruggedmaker2 said, you’ve gotta have actual proof that they’re registered with the IRS. You can't just take their word for it.
So, I’m sitting in this seminar today, right? And get this—one of the speakers actually has the nerve to claim that the evidence has to be "reasonable." Like, excuse me? What does that even mean in practice? Total nonsense. 😕It’s the truth. Plain and simple.
Honestly, they still haven't even figured out what they actually want from us. It’s a total mess. Are we talking about some official confirmation from the IRS? A copy of their final ruling? Who knows anymore. They’re just throwing spaghetti at the wall to see what sticks. All I know is that whatever this ends up being, it better be legitimate and make sense, because I am not playing these games.

I don't even know where to start with this one. Honestly, I’m just sitting here staring at my screen wondering how we even got to this point. It feels like everything is just sliding sideways lately, doesn't it? You try to do things the right way, follow the rules, play the game, and then—bam—the rug gets pulled out from under you anyway. It’s exhausting. Just constant, grinding exhaustion. I was grabbing a coffee downtown the other day—just a quick caffeine fix before starting the workday—and watching people rush around, and all I could think was, "Does anyone actually have a clue what's going on?" Probably not. We're all just winging it. Anyway, that's just my two cents. Don't mind me. kaže:
If we’re talking about services—you know, that B2B side of things—then yeah, it works. It holds up.

Spot on. Even when you're just talking about services, that tax liability follows you—it’s the same deal with B2B deals involving third countries. It doesn't matter how you slice it; the IRS is going to want their cut.

ruggedmaker2 said:ruggedmaker2, you don't get to call this a three-way deal because Canada isn't even in the European Union.
You’re basically just sourcing high-quality stuff from Germany and shipping it over to Canada.

When you're pulling goods out of Germany, you've got to deal with the headache of VAT and prepayments hitting you all at once in the same accounting period.
Then, when you export those goods to Canada, you get a pass on the VAT side of things—as long as you have your customs declarations and proof that the shipment actually cleared the European Union.

Please, just check the official IRS pages—if you're hauling freight from Germany to Canada, it doesn't matter who you invoice, whether it's someone in the EU, a third country, or an American entity... it's considered transit through the US under Section 44. But then there's this RIF regulation from 2013 saying if you're moving stuff from Germany to Canada and the client is an American corporation, you're supposed to charge American VAT. I even called a tax consultant and he insists it's just transit, yet the RIF has its own whole theory... honestly, who's actually right here?

ruggedmaker2 said:

I don't know what to tell you. Sometimes things just happen, and there isn't much anyone can do about it. It’s just how the world works. Life's messy like that. ruggedmaker2 says:
Don't forget to grab some kind of proof that these guys are actually tax-paying entities over in Canada. Since you’re the one handling the transfer, you need hard evidence they’re registered for VAT. You can't just run them through the IRS database because they aren't part of the USA. Look, what they do on their end—whether they actually settle up the VAT or not—is none of your business. Just cover your own tracks.

Just got back from a seminar, still feeling that post-conference brain fog, so I figured I’d jump in here and add my two cents.
Like ruggedmaker2 said, you’ve gotta have actual proof that they’re registered with the IRS. You can't just take their word for it.
So, I’m sitting in this seminar today, right? And get this—one of the speakers actually has the nerve to claim that the evidence has to be "reasonable." Like, excuse me? What does that even mean in practice? Total nonsense. 😕It’s the truth. Plain and simple.
Honestly, they still haven't even figured out what they actually want from us. It’s a total mess. Are we talking about some official confirmation from the IRS? A copy of their final ruling? Who knows anymore. They’re just throwing spaghetti at the wall to see what sticks. All I know is that whatever this ends up being, it better be legitimate and make sense, because I am not playing these games.

I don't even know where to start with this one. Honestly, I’m just sitting here staring at my screen wondering how we even got to this point. It feels like everything is just sliding sideways lately, doesn't it? You try to do things the right way, follow the rules, play the game, and then—bam—the rug gets pulled out from under you anyway. It’s exhausting. Just constant, grinding exhaustion. I was grabbing a coffee downtown the other day—just a quick caffeine fix before starting the workday—and watching people rush around, and all I could think was, "Does anyone actually have a clue what's going on?" Probably not. We're all just winging it. Anyway, that's just my two cents. Don't mind me. kaže:
If we’re talking about services—you know, that B2B side of things—then yeah, it works. It holds up.

Spot on. Even when you're just talking about services, that tax liability follows you—it’s the same deal with B2B deals involving third countries. It doesn't matter how you slice it; the IRS is going to want their cut.

The folks at the IRS told me I need a business registry extract and a confirmation from them proving they're taxpayers—and I'm talking about three different countries...

@ruggedmaker2
Was there any mention of an update to the IRS tax code?

Richard Howard55 said:@ruggedmaker2
Was there any mention of an update to the IRS tax code?

They didn't say a word about it. Is there some rumor flying around already?
The consultants basically just admitted that both the laws and the IRS tax code are written in total gibberish. They told us we could give them a call whenever we need a hand navigating the mess.

One thing they did bring up was that even the folks over at the IRS are scratching their heads over certain construction services. She mentioned how it clashes with zoning laws and those building permit regulations (🤔 I think that’s what they’re called).
Apparently, some of it just doesn't square with the current tax code.

But look, we don't touch construction work, so that whole area is a bit of a black hole to me. I couldn't really follow all the technicalities. I'm guessing anyone actually working in that field is going to have to go hat in hand and beg the IRS for a formal opinion.

By the way, is anyone here having to register for sales tax purposes over in Austria? I need to start digging into how that works once I get back from vacation, just so I have a general idea of where to start.