Doing business with USA member states

Nicole Lee6 said:Honestly, this is driving me crazy too. I handled a few transport jobs in July for a partner over in Canada. He issued me an invoice for his commission (based on those transport services I did for him during July), but the invoice itself is dated August 6th. On that one document, he listed all my July shipments and showed exactly how much he's keeping as a cut.

So now, which date am I supposed to use to convert the USD to my local currency?
- August 6th (the date he actually issued the invoice)?
- July 31st (the last day of the accounting period when the services covered by his commission were actually completed)?
- Or is there some other rule I'm missing?

I guess the invoice date is what matters. I’d probably just print out the Federal Reserve mid-market rate for that specific day (August 6th), staple it to the invoice, calculate the total in USD, and book it that way.

I’m scratching my head over something again.
So, here’s the deal: I handle transport services through a partner’s web portal. They have these little input fields where I just plug in the mileage and the specific jobs I completed, and then the software spits out the total value of those services in USD.
When I go to generate my own outgoing invoice based on the figures provided by that app (basically their price list), I set the invoice date as July 31st, but the actual delivery date was July 15th. To get the numbers right, I took the USD amount generated by the application and converted it into my local currency using the average exchange rate from the Federal Reserve on the date the invoice was issued—so, using the July 31st rate.

Now I'm stuck wondering if I actually did this correctly. Should I have been using the exchange rate from the day the service was actually performed (July 15th)? Or does it even matter much in this scenario? Since it’s a B2B transaction where the tax liability is transferred to the partner, there's no VAT obligation on my end; it's just the fee amount hitting my IRA. Given that, does it really matter which exchange rate I applied?

silentsurfer11 said:I guess the invoice date is what matters. I’d probably just print out the Federal Reserve mid-market rate for that specific day (August 6th), staple it to the invoice, calculate the total in USD, and book it that way.

What's actually tripping me up is the inconsistency; it seems like we look at the delivery date for physical goods, but when it comes to services, the rules seem to shift entirely....

Just got word back from the IMF. Turns out the Federal Reserve uses the exchange rate from the actual invoice date.

So, we just picked up some inventory from the USA.
What exactly goes into the taxable base for calculating the sales tax on the acquisition?
Is it just the value of the goods converted to USD using the Federal Reserve mid-market rate on the invoice date?
And what about shipping costs? Do those get tacked onto the base too?

Steven Anderson14 said:Just got word back from the IMF. Turns out the Federal Reserve uses the exchange rate from the actual invoice date.

😂 Honestly, everything in this country is just pure chaos 🤣
In the meantime, I actually heard back from the RRIF, and apparently, for services, they don't care about the invoice date—they look at when the service was actually performed. So, in my specific situation, they’re telling me I should be converting the currency using the rate from July 31st (since that was the last day of the period the service providers are billing commission for) and then include that in my July VAT filing for liabilities/input tax.

🙄

I'm going to try calling the service providers over in the Midwest to see if they plan on putting their commission invoice into their July or August reporting. I want to align myself with whatever they do, because their reporting and my acquisition filing absolutely have to match up perfectly—like a mirror image, right?

Nicole Lee6 said:😂 Honestly, everything in this country is just pure chaos 🤣
In the meantime, I actually heard back from the RRIF, and apparently, for services, they don't care about the invoice date—they look at when the service was actually performed. So, in my specific situation, they’re telling me I should be converting the currency using the rate from July 31st (since that was the last day of the period the service providers are billing commission for) and then include that in my July VAT filing for liabilities/input tax.

🙄

I'm going to try calling the service providers over in the Midwest to see if they plan on putting their commission invoice into their July or August reporting. I want to align myself with whatever they do, because their reporting and my acquisition filing absolutely have to match up perfectly—like a mirror image, right?

...assuming we're still talking about an invoice dated August 6th from that Canadian partner; I doubt they can file an IRA for a commission issued in August back in the July tax period.

silentsurfer11 said:...assuming we're still talking about an invoice dated August 6th from that Canadian partner; I doubt they can file an IRA for a commission issued in August back in the July tax period.

Look, once I finally get off the phone with them, I'll let everyone know what the verdict is. I've decided to just follow their lead—we'll both report it in the same month so there isn't some messy discrepancy where I file in August while they claim it in July.🤷

I was playing around in QuickBooks earlier and noticed that if I issue an invoice for a service involving a transfer, dated August 6th, but set the actual service date to July 15th, the system automatically pulls it into the August sales tax and VAT reports because it tracks based on the invoice date. I need to see how they are presenting things on their end...

The thing is, for every single service performed—per the specific work order or guarantee—I generate a separate invoice. My goal is always to have invoices for services rendered during the month issued no later than the very last day of that month.

But here's the catch: they take all my individual invoices that I've sent over and instead of creating a unique commission invoice for every one of my bills, they consolidate everything into one massive "summary invoice." This single document lists every single intervention number, our corresponding invoice amount, and their specific commission share for each line item. So, this "summary invoice" they generate is dated August 6th, even though it covers the entire period from July 1st to July 31st.

Now, I actually received a clarification on this: if they are taking their commission for a service performed in July, then my obligation to account for the sales tax on that commission also arises in July. Why? Because that commission pertains to a July service, and realistically, they acted as the broker for that service in July.🤣 Since this is a summary invoice covering commissions for services on July 5th, July 18th, and July 23rd, I am certainly not going to break down the total commission amount by those specific dates—especially not trying to recalculate the individual tax bases using the exchange rates from July 5th, then July 18th, and so on. Instead, I should probably just use the exchange rate from the last day of the month to convert the total commission base in one go.🤔 I suppose, 🤔 at least that's how I interpreted it.

Look, I’ve wasted enough money on seminars over the years to realize one thing:
lawyers and consultants can join any course they want without blinking. To them, it’s just some jargon or a few letters on a page. But for people like us? If things get too theoretical or if someone starts splitting hairs over nothing, it feels like a noose tightening around our necks.

The only thing that actually matters to me is the date on the invoice (I don't care what else it says... whether it was generated then or now... whether it’s a transaction record or fiscalized... whatever... I really don't give a damn!). 😢

Drew Rogers6 said:So, we just picked up some inventory from the USA.
What exactly goes into the taxable base for calculating the sales tax on the acquisition?
Is it just the value of the goods converted to USD using the Federal Reserve mid-market rate on the invoice date?
And what about shipping costs? Do those get tacked onto the base too?

Anyone got an answer?

There’s been some chatter on these boards about being able to claim the pre-tax deduction on R-2 accounts right away, but my auditors just gave me a heads-up that we shouldn't be doing that yet...
Does anyone have any recent updates or intel on this? Thanks.

So, quick question regarding the new sales tax forms kicking in on July 1st... do those pass-through items—you know, stuff like consumption tax and reimbursements—actually get included in the new layout?
Up until June 30th, we were just tossing those pass-through entries under section I.1...

I mean, does it even make sense to include them in the new format at all, considering they're basically non-taxable supplies? 🙄 Thanks in advance for any insight...

So, I had an international client come in for some repairs today. He wants the invoice issued to his company, and the total amount including tax comes out to $1805.

1. Is he actually allowed to just hand me cash for this? Or am I required to issue a transaction receipt so I can take the cash from him—since he’s heading back home "today" and wants to settle up now because, say, the local bank systems are acting up—and then I basically carry that cash to the bank myself to make a deposit in his name? It would be like he paid via transfer when he really just handed me bills. I’m asking because I’m genuinely unsure if that cash payment limit of $1667 applies to a situation like this, where a foreign corporation is paying a sole proprietor for on-site repairs in cash.

2. Now, looking at the breakdown: if the labor fee is $640 and the cost for the installed parts is $0.80 (which means the parts make up more than 50% of the total), my understanding is that this should be treated as a supply of goods. In this case, we're talking about a car repair—though it essentially functions as a sale of goods because of the value of the parts versus the labor. The vehicle is owned by a foreign legal entity, the repair was performed here in the States, and the guy is driving that car straight back to Germany. He provided all his corporate details and VAT ID, so my question is: am I permitted to issue an invoice without sales tax? I might have handled this wrong, but honestly, I charged him the full tax, and if he wants a refund, he can deal with the authorities once he gets back to Germany.

Has anyone here actually tried emailing the IRS to verify a VAT number?

Here’s the deal: when I check a partner based in Germany through the VIES system, it confirms the number is valid, but it doesn't actually show who the number belongs to. So, I’m just going to paste what it says on the IRS website right here:
If you need to verify more than just the validity of a VAT ID—specifically if you want to confirm the name and address of your business partner—and those details aren't showing up in the search results, you can contact the IRS, Headquarters, European Affairs and International Exchange of Information Department, International Information Exchange Service at this email address:

verification-check@irs.gov
To request this verification from the IRS, you have to provide the following identification details:
Your own VAT ID
Your registered business name or full legal name
Your registered business address
The foreign VAT ID you are trying to verify
The name and registered address of your business partner
Based on your inquiry, the IRS will send you a document via email containing the official results of the verification process.

So, I go ahead and send them an email with all those specific details, hoping they'll give me a real answer.
Dear Sir/Madam,
Regarding your inquiry about the validity check, please find attached the documentation regarding the verification of the VAT identification number(s).
You can also perform validity checks directly through the European Commission website: http://ec.europa.eu/taxation_customs/vies/

For more information, visit the IRS website: http://www.irs.gov/VAT-EU/...D-numbers.aspx
Sincerely,

Okay, seriously, has anyone lost their mind?!?!?! 🙂

Nicole Lee6 said:Has anyone here actually tried emailing the IRS to verify a VAT number?

Here’s the deal: when I check a partner based in Germany through the VIES system, it confirms the number is valid, but it doesn't actually show who the number belongs to. So, I’m just going to paste what it says on the IRS website right here:
If you need to verify more than just the validity of a VAT ID—specifically if you want to confirm the name and address of your business partner—and those details aren't showing up in the search results, you can contact the IRS, Headquarters, European Affairs and International Exchange of Information Department, International Information Exchange Service at this email address:

verification-check@irs.gov
To request this verification from the IRS, you have to provide the following identification details:
Your own VAT ID
Your registered business name or full legal name
Your registered business address
The foreign VAT ID you are trying to verify
The name and registered address of your business partner
Based on your inquiry, the IRS will send you a document via email containing the official results of the verification process.

So, I go ahead and send them an email with all those specific details, hoping they'll give me a real answer.
Dear Sir/Madam,
Regarding your inquiry about the validity check, please find attached the documentation regarding the verification of the VAT identification number(s).
You can also perform validity checks directly through the European Commission website: http://ec.europa.eu/taxation_customs/vies/

For more information, visit the IRS website: http://www.irs.gov/VAT-EU/...D-numbers.aspx
Sincerely,

Okay, seriously, has anyone lost their mind?!?!?! 🙂

That drove me absolutely crazy too. 😁

Q15: Is it possible to obtain the name and/or address associated with a specific VAT ID?

Certain member states allow the display of names and addresses for taxpayers where the VAT ID is currently active. If the name or address isn't showing up, it means that specific member state does not permit the disclosure of that data.

Clients have the right to receive confirmation from their local tax authority regarding whether a specific VAT ID is linked to a particular name and/or address.

wiredmarlin41 said:That drove me absolutely crazy too. 😁

Q15: Is it possible to obtain the name and/or address associated with a specific VAT ID?

Certain member states allow the display of names and addresses for taxpayers where the VAT ID is currently active. If the name or address isn't showing up, it means that specific member state does not permit the disclosure of that data.

Clients have the right to receive confirmation from their local tax authority regarding whether a specific VAT ID is linked to a particular name and/or address.

They just sent me back the exact same thing I pulled through VIES—it shows the number is valid, but there’s absolutely no name or address attached. So, what am I supposed to do now? Am I legally cleared to proceed with the reverse charge, or am I flying blind here?

"Invoices issued by earners (received by winners) after July 1st can be claimed as input tax immediately. If anyone told you otherwise—they’re dead wrong!"

Thanks APIS, but they actually just gave me an answer saying it isn't possible for this specific inquiry. Honestly, trying to get decent advice from the IRS is a nightmare...

Christian Cruz41 said:"Invoices issued by earners (received by winners) after July 1st can be claimed as input tax immediately. If anyone told you otherwise—they’re dead wrong!"

Thanks APIS, but they actually just gave me an answer saying it isn't possible for this specific inquiry. Honestly, trying to get decent advice from the IRS is a nightmare...

Quoting: "A VAT registrant calculating tax based on issued invoices may deduct the tax contained in invoices marked R2, regardless of whether such an invoice has been paid yet."

The question and answer can be found under item 2, specifically via this link: http://www.irs.gov/pub/...aspx?id=18694

Sure, the answer got buried under all those construction services, but it clears up everything 🙂🙂🙂

Hi everyone.
I have a quick question regarding this new form we're using. For some reason, my imports from outside the country are showing up on my Sales Tax return as both input tax and assessed tax. It looks like they're just canceling each other out, when in reality, that amount should be reducing my total Sales Tax liability.🤷
Is there perhaps another section where I need to enter specific details about imports?
We've already taken care of the import duties.