Doing business with USA member states

ruggedmaker2 said:Look, if this is a standard B2B deal, you just skip the sales tax entirely. You just add a little note mentioning the reverse charge mechanism.
I can't recall the exact section or subsection of the tax code off the top of my head right now, but that's how it works.

Since we're dealing with a vehicle—which is a tangible good—rather than a service, I did a little digging into the tax regulations. It seems like the reverse charge might not even apply here, does it?

In this situation, there’s really nothing else it could be besides the Sales Tax Law. 😉
Reverse charge basically just means the tax liability shifts over to the buyer, which is pretty much what you're looking at here. (There is some other thing involving margin taxation, but honestly, I have no clue if that even applies to you).

Just make sure that when you mention the reverse charge bit, you cite the specific section of our Sales Tax Law or point to the relevant part of the USA regulations. That should cover your bases.

And obviously, you've got to list the invoice total in dollars—that's mandatory. Putting it in euros is totally optional. (Though, let's be real, everyone does it just to make life easier for the customer... an invoice can't be less than what's required, but it can certainly be more, right? Same goes for the euro conversion).

[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]

If a local LLC wants to invoice an entrepreneur based in Austria for office space rental, does the VAT need to be included on the bill?

I actually reached out to the IRS via a formal inquiry just to figure out how we’re supposed to track when a tax liability lands on our doorstep if "reverse charge" isn't explicitly flagged. Their response? Purely dismissive. They basically told us we have to hash it out with the vendor ourselves and find some way to reach a mutual agreement. It's like they're saying, "Figure it out with them now, because when the auditors inevitably show up, they'll find their own creative way to make sure you end up paying the fine anyway."🙂

Don't sweat it. 👍
Honestly, it doesn't matter which specific clause they slap on there, as long as they're playing by the rules of the US tax code and federal regulations.
Whether the invoice says "reverse charge," "tax-free delivery," or cites some obscure section of the tax code... who cares? It's all noise.
What actually matters—the only thing that keeps the IRS off your back—is knowing exactly what’s being bought or sold and where the tax obligation actually sits. Period.
And obviously, in this whole B2B setup, both parties have to be registered taxpayers and properly verified in the federal system.

Hello everyone! I could really use some help here! 🙏🙏
I have a client—an American company—that needs to pick up goods in Canada and then transport them over to Italy... What kind of paperwork is required for this? I think I heard something about a specific statement that needs to be included on the invoice... and also something regarding an "INTRASTAT" filing... I guess?!!?? If anyone has dealt with this before, please—I would truly appreciate your advice!!! 🕺

You didn't give me enough to go on here. Are we talking about selling actual goods, or just a simple freight service? And what do you mean by "a single company in California"?
Look, don't lose sleep over Intrastat. It's only for specific filers, and they’ll send you a notice if you actually need to deal with it. If you haven't received an official notice, you don't have any obligation to file anything. Period.

Honestly, just scroll back through this thread for a bit. It'll clear up the whole mess for you.

Betty King7 said:Since this is our first time importing goods from another EU member state (in this case, from a supplier in Austria), I need a quick sanity check to ensure my understanding is correct. We are purchasing solar panels from a company that is VAT-registered and holds a valid VAT ID. There are no customs duties involved. We calculate the base amount using the mid-market exchange rate from the Federal Reserve on the invoice date, then we claim the input VAT and record the liability accordingly on our six-month VAT return and the standard VAT filing. Have I missed any critical steps in this process?

Does anyone actually need to submit the CMR shipping manifest?

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.

👍

Ethan Bailey18 said:Precisely. You have to fax or email the invoice to the freight forwarder for Intrastat reporting purposes.

👍

Could we get a more detailed explanation? We haven't even received the invoice yet. We handled the transport from Canada ourselves.

Betty King7 said:Could we get a more detailed explanation? We haven't even received the invoice yet. We handled the transport from Canada ourselves.

The accounting side is fine. You need to get that invoice to your customs broker—assuming you aren't handling Intrastat filings internally.
If the goods entered the US, there’s always a document that triggers the invoice...
My brokers are usually pretty on top of things; they demand invoices for everything moving in or out of the country.
Is it possible you haven't been notified that you're now required to file Intrastat?
That requirement is based on your trade volume within the USA over the previous period.
Your best bet is to call the same broker who handles your usual imports and exports. Right now, you're looking at acquisition and delivery.🤔

I’m guessing if they're buying goods from the European Union for the first time, they become an Intrastat declarant—so basically, just like you said, you handle the obligation and the input tax on the VAT return, then send the VAT S report via e-filing every six months and you're all set.

Look, you don't just wake up one day and suddenly owe the government reports. You only become an Intrastat declarant if you get an official notice in the mail.
No notice? Then you've got zero obligations. Period.

I was digging through the U.S. Census Bureau site earlier:
Reporting Requirements

Basically, any business entity registered for sales tax becomes an Intrastat declarant if their annual trade value with European Union countries hits certain thresholds—whether that's for imports, exports, or both.

Back in 2015, the threshold for imports was set at 1,800 $0.00, while exports were capped at 1,000 $0.00.

Edit:
I know there are some weird edge cases with companies involved in refining or specialized processing where things get a little messy, but I doubt that applies here.

ruggedmaker2 said:Look, you don't just wake up one day and suddenly owe the government reports. You only become an Intrastat declarant if you get an official notice in the mail.
No notice? Then you've got zero obligations. Period.

I was digging through the U.S. Census Bureau site earlier:
Reporting Requirements

Basically, any business entity registered for sales tax becomes an Intrastat declarant if their annual trade value with European Union countries hits certain thresholds—whether that's for imports, exports, or both.

Back in 2015, the threshold for imports was set at 1,800 $0.00, while exports were capped at 1,000 $0.00.

Edit:
I know there are some weird edge cases with companies involved in refining or specialized processing where things get a little messy, but I doubt that applies here.

Oh, I know... I actually handle filings for two people in my Intrastat group, so I mentioned they probably aren't required to report.
Plus, you don't even have to send everything to a freight forwarder—your accountant can just handle the Intrastat stuff themselves.

I need some help here. I just received a shipment from the Czech Republic, but the invoice was issued by a company in Mexico. Is this some kind of fake tripartite deal? How am I supposed to handle this on my sales tax filings and reports?
This is all totally new to me. Does anyone actually know how this works?

Steven Anderson14 said:I need some help here. I just received a shipment from the Czech Republic, but the invoice was issued by a company in Mexico. Is this some kind of fake tripartite deal? How am I supposed to handle this on my sales tax filings and reports?
This is all totally new to me. Does anyone actually know how this works?

Just to add more context: the supplier is actually registered for VAT in Canada.
So, we've got an invoice from Mexico featuring a Canadian VAT number (which I double-checked in the VAT Information Exchange System), and a CMR from the Czech Republic.
Is this just a standard purchase, or are we looking at a triangular transaction?

Steven Anderson14 said:Just to add more context: the supplier is actually registered for VAT in Canada.
So, we've got an invoice from Mexico featuring a Canadian VAT number (which I double-checked in the VAT Information Exchange System), and a CMR from the Czech Republic.
Is this just a standard purchase, or are we looking at a triangular transaction?

Bingo!!!!! It’s a triangular deal—check sections 13, 13, and 6 of Part VIII. 🎉

Hey, I could really use some help here,

So, we’re shipping goods to a customer over in Sweden, who’s actually manufacturing components for another American company. Basically, we’re delivering directly to this American firm where everything just gets integrated into what the Swedes are making. My big question is: how am I supposed to handle the sales tax on these invoices? Or, honestly, should I even be charging it at all? I’m leaning towards thinking it shouldn't be applied, but our contacts in Sweden keep insisting on it. They’re arguing that since the goods we’re invoicing never actually leave the US, it's gotta be taxed, even though the buyer is sitting right there in Sweden.
Thanks for any insight you guys can give me🙂

The Swedes actually have a point here.
The goods aren't even leaving the US, so you've gotta charge sales tax.
It doesn't matter where the buyer's headquarters are located; what matters is where the delivery actually happens.

When you're trying to figure out if sales tax applies, the whole thing hinges on what counts as the place of delivery—and in your situation, that’s right here in the States.
Sure, you're sending an invoice to Sweden, but since you aren't actually shipping anything there, you still owe the tax.