Doing business with USA member states

I have a question regarding triangular trade, especially seeing the comments above about fraudulent three-way transactions.
1. Goods were shipped from Canada to the US, but I received the invoice from a company based in Canada. When I checked with Intrastat, they insisted I report it because the goods physically entered the US. However, I’m stuck on the sales tax implications. I called the IRS, and the agent told me that the Canadian firm needs to register either here in the States or back in Canada. My deadline for filing is this Friday, and frankly, I highly doubt I'll receive a corrected invoice in time. I'm at a complete loss as to how to proceed.
2. I also have a shipment originating in Slovakia destined for a customer in Canada. The Slovakian supplier invoiced me using my Canadian tax ID, while I issued my own invoice using an American tax ID to the Canadian buyer. It’s a total mess—the invoice was delayed, and to make matters worse, the parent company is actually based in Belgium, even though they operate the factory in Slovakia; consequently, the invoice uses a Belgian tax ID. It's pure chaos. My accountant suggested I shouldn't record these invoices in my main books, but rather book the supplier through some sort of clearing account that I can't seem to locate anywhere.
My core question is: how should I handle the bookkeeping when there is a delivery from one member state to another, but the goods never actually enter the US (for instance, if the invoice uses a Canadian tax ID and I'm filing in Canada)? I need clarity on both the ledger entries and the sales tax forms, especially since I noticed they've introduced a specific line item for triangular transactions.

Thanks,

[QUOTE=Darsey;53590121]You really need to figure out if you're performing services directly on real estate—meaning, if this disassembly and reinstallation (assuming you aren't selling them the equipment itself, just doing the labor) is being done to something legally classified as real property.
If it qualifies as work on real estate, it falls under those specific tax exemptions, and the place of taxation becomes wherever that property is located. You’ll have to check their local laws, because tax regulations regarding property vary quite a bit from state to state.[/QUOTE
It isn't real estate; we're talking about elevators we serviced. We'll issue a separate invoice for the delivery, clearly marked as goods intended for export, which should be exempt from sales tax under Section 41, Subsection 1(a) of the Tax Code.
Then there's a separate invoice for the actual disassembly and installation of the elevators. My take is that this counts as a service performed within the USA where the tax liability shifts to the buyer via the reverse charge mechanism, per Section 79, Subsection 7 of the Sales Tax Act—specifically looking at Column I, Line 4 on the tax return. 😵
Does that sound right to you?[/QUOTE]

As long as it isn't tied up in real estate, I don't care.

Darsey, thanks for getting back to me, but I’ve run into one more snag. I just got word from the UN stating that
my business isn't registered for sales tax under Section 450 of the Internal Revenue Code—so, am I just supposed to go ahead and book these supplier invoices and maintenance costs without accounting for any sales tax, or am I missing something?

Help! I’ve run into a bit of a situation: we bought some goods from a Canadian company that actually uses our US tax ID. Does this still count as an acquisition, and how should I handle it on the sales tax return? Should it be included in the VAT filing?

Thomas Fisher6 said:Darsey, thanks for getting back to me, but I’ve run into one more snag. I just got word from the UN stating that
my business isn't registered for sales tax under Section 450 of the Internal Revenue Code—so, am I just supposed to go ahead and book these supplier invoices and maintenance costs without accounting for any sales tax, or am I missing something?

Yeah.

Jonathan Garcia said:Help! I’ve run into a bit of a situation: we bought some goods from a Canadian company that actually uses our US tax ID. Does this still count as an acquisition, and how should I handle it on the sales tax return? Should it be included in the VAT filing?

What does it actually say on the Invoice? Did they charge you sales tax or not?

It wasn't charged. The bill is in English and Spanish, and it clearly shows the tax base $667 and a zero amount for the tax

I mean, I honestly don't know. If the taxpayer is based here in the States, why on earth wouldn't they be charging us our own sales tax? 🤔
What kind of exemption are they even trying to pull on this bill?

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

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.

Honestly, looking at that thing, it might not even be a Bill—could just be a packing slip, a delivery note, or some other random piece of paperwork. 🤔
I don't know a lick of Canadian, so I have zero clue what they call an Invoice over there. Just toss that document title into Google Translate and see what happens 😁 It’s probably just a shipping notice, and the actual Bill will likely show up in your mailbox in a few days.
Where I'm from, we usually just deal with an Invoice or a Bill, so I can't really help much more than that 😁
Like Ethan Bailey18 was saying earlier, a proper Bill needs to have specific details on it—if nothing else, it should at least list that relevant USA directive number.

ruggedmaker2 said:Honestly, looking at that thing, it might not even be a Bill—could just be a packing slip, a delivery note, or some other random piece of paperwork. 🤔
I don't know a lick of Canadian, so I have zero clue what they call an Invoice over there. Just toss that document title into Google Translate and see what happens 😁 It’s probably just a shipping notice, and the actual Bill will likely show up in your mailbox in a few days.
Where I'm from, we usually just deal with an Invoice or a Bill, so I can't really help much more than that 😁
Like Ethan Bailey18 was saying earlier, a proper Bill needs to have specific details on it—if nothing else, it should at least list that relevant USA directive number.

"Szamla" is the word for bill in Canadian, 😁

But what I actually want to know is—has anyone dealt with procedure 42?

An American taxpayer clearing goods in Canada using procedure 42—they don't pay the local IRS because the goods are heading straight to the States.

Where do I book an invoice from a third country in Synesis? Is it under import VAT, or is it non-taxable?

And what about those specific tax forms? In my opinion, it doesn't make sense since we don't use procedure 42 here in America...

Alright, let me hear your thoughts...

Has anyone here dealt with registering a business for VAT purposes in Germany?
What does the process actually look like?
Thanks!

The invoice is 😢 we aren't going to book it. Thanks for the tips!

Carol Price4 said:"Szamla" is the word for bill in Canadian, 😁

But what I actually want to know is—has anyone dealt with procedure 42?

An American taxpayer clearing goods in Canada using procedure 42—they don't pay the local IRS because the goods are heading straight to the States.

Where do I book an invoice from a third country in Synesis? Is it under import VAT, or is it non-taxable?

And what about those specific tax forms? In my opinion, it doesn't make sense since we don't use procedure 42 here in America...

Alright, let me hear your thoughts...

Anyone? Apis, ruggedmaker2, anyone got an idea???

When dealing with a third-country import (using procedure 42 over in Canada), how do I log that in Synesis—do I go through "VAT due on imports" (non-taxable), or just a standard import entry (non-taxable)?

As for form 42—I'm thinking no, since that's not a thing in the US, and the Canadian customs broker handles the filing, right?

Carol Price4 said:Anyone? Apis, ruggedmaker2, anyone got an idea???

When dealing with a third-country import (using procedure 42 over in Canada), how do I log that in Synesis—do I go through "VAT due on imports" (non-taxable), or just a standard import entry (non-taxable)?

As for form 42—I'm thinking no, since that's not a thing in the US, and the Canadian customs broker handles the filing, right?

Regarding procedure 42, an American company can only actually pull that off in Canada...
You can't run procedure 42 in the buyer's own country; it has to be done in a different country entirely.
We handle this exact process in Canada for our clients coming from Canada, Austria, Germany, France, the United Kingdom, America...
If a Canadian customs company is handling procedure 42, we ship it over to the border in Austria for customs clearance.
Best,

I’d love to lend a hand, but I honestly have zero experience with this stuff yet.
Plus, I don't even have a Synesis account, so I'm completely in the dark. Sorry!

placidlynx13 said:Regarding procedure 42, an American company can only actually pull that off in Canada...
You can't run procedure 42 in the buyer's own country; it has to be done in a different country entirely.
We handle this exact process in Canada for our clients coming from Canada, Austria, Germany, France, the United Kingdom, America...
If a Canadian customs company is handling procedure 42, we ship it over to the border in Austria for customs clearance.
Best,

Actually, let me correct myself... it doesn't have to be Canada—any EU member state works. So, you could do it in Canada too. 😉

Personally, I think it could work in America if the goods move immediately—say, right into Canada—so the buyer's VAT number is used and the cargo leaves the US right away.

Carol Price4 said:Actually, let me correct myself... it doesn't have to be Canada—any EU member state works. So, you could do it in Canada too. 😉

Personally, I think it could work in America if the goods move immediately—say, right into Canada—so the buyer's VAT number is used and the cargo leaves the US right away.

Well, sure, you can technically do it anywhere in Europe, but you really need to double-check how they handle things in that specific country. It all depends on what the local IRS or tax authorities require from a business and their specific procedures. From what I know, goods coming in from places like Canada or Mexico can't be cleared at the border heading toward Canada because the freight forwarders and the tax offices end up making impossible demands... so instead, things tend to go through borders heading toward Bulgaria or Romania. Honestly, your best bet is to check exactly what’s required in whichever country you're planning to run the Section 42 procedure in.

I didn't really catch a straight answer on a thread that started way back on page 33, so I figured I’d just ask again. If I'm selling consulting services to a company based in Ireland, and we're looking at landing a contract worth roughly $100 $0.00 per year, I am definitely going to set up a sole proprietorship to handle the incoming funds—I figure the simplified tax filing is my best bet. Aside from that, what kind of paperwork or unexpected overhead should I be watching out for when doing business with an Irish firm?