Doing business with USA member states

Drew Rogers6 said:Hey everyone,

So, we just picked up a spare part for one of our trucks from an Austrian company for about $260. We gave them our tax ID, but they didn't charge us any sales tax. My brain is honestly fried right now—I can't for the life of me remember if I'm supposed to include this in my sales tax filings or what... 🤔

Yeah, you definitely include that on your sales tax forms too!

Hey everyone!
So, my company just took an advance payment from a client that’s also on the VAT system here in the States. We aren't issuing the actual invoice for another two months when the goods are actually delivered. I'm planning on filing the ZP form once the delivery happens in two months, so I'm not reporting anything right now. As for the advance, I'm just booking the receipt in the CIA books normally, obviously without any tax included.
Is that the right way to handle this? Or am I supposed to be reporting the advance on the ZP? I don't think so... first time I've run into this specific scenario.

Joshua Morris2 said:Hey everyone!
So, my company just took an advance payment from a client that’s also on the VAT system here in the States. We aren't issuing the actual invoice for another two months when the goods are actually delivered. I'm planning on filing the ZP form once the delivery happens in two months, so I'm not reporting anything right now. As for the advance, I'm just booking the receipt in the CIA books normally, obviously without any tax included.
Is that the right way to handle this? Or am I supposed to be reporting the advance on the ZP? I don't think so... first time I've run into this specific scenario.

I had a similar situation where... well, the advance was paid on the last day of the month, and the delivery didn't happen until the third of the next month.
I waited and filed it when the delivery actually took place.
No one has flagged it yet, and I'm hoping everything looks fine on the annual audit.
I wasn't even sure myself if it was the right move... but hey, I know someone who definitely knows the answer.😉

Ethan Bailey18 said:I had a similar situation where... well, the advance was paid on the last day of the month, and the delivery didn't happen until the third of the next month.
I waited and filed it when the delivery actually took place.
No one has flagged it yet, and I'm hoping everything looks fine on the annual audit.
I wasn't even sure myself if it was the right move... but hey, I know someone who definitely knows the answer.😉

Thanks for the heads up. I think I’ll just wait two months until the actual delivery happens. By the way, did you guys record the advance payment under a standard CIA entry?

Joshua Morris2 said:Thanks for the heads up. I think I’ll just wait two months until the actual delivery happens. By the way, did you guys record the advance payment under a standard CIA entry?

No... just in finance based on the bank statement... specifically for advances received from abroad...
I don't see much point in using a CIA since I'm not touching sales tax—how would you even execute a legitimate CIA then?
You’d just end up duplicating account 121, wouldn't you?
It's never simple for us.🤣

Yeah, I'm booking it just like Ethan Bailey18 👍

I haven't seen anything from anamia69 lately... just wondering where they went. kaže:
I went through something pretty much identical... except in my case, it was about that end-of-the-month advance... and then the actual delivery wasn't due until the third of the following month...
I let them know exactly when the delivery was coming...
Still haven't heard back from anyone... I'm just hoping my age won't be an issue when they finally call...
I wasn't even sure if I was doing the right thing by posting this... but honestly... I know there’s someone here who definitely knows the deal...😉

[Quincy]:

I can't believe I'm even typing this out... but here we go. Honestly, looking at how things are moving lately, it feels like everyone is just walking around in a fog. You see it everywhere, from the way people are acting on the streets to the absolute chaos in the news cycles... it’s exhausting. It’s like we’re all collectively waiting for something to click, but nothing ever does. Just a lot of noise and zero substance. Anyway... just my two cents. Or maybe just a vent. Whatever. kaže: Nah... just the finance side of things, really... specifically regarding those advances we get from overseas... I don't see much point in involving the IRS here since I'm not even touching Sales Tax... I mean, how would you even execute a legitimate IRU without that part of the equation? ... So... would they actually go through with a 121 duplication? Just wondering if that's even on the table... maybe... It’s not exactly easy for us...🤣

Yeah, true. Just following the lead is enough. Thanks a ton for the heads-up... Honestly, things aren't exactly easy for us right now...🙂

Hey everyone!

So, we just got hit with an invoice for some business consulting services from a firm over in Austria.
The thing is, the bill says they didn't charge any sales tax because they're considered a small business taxpayer. I'm a little lost here—do we need to handle the sales tax on our end when we pick up these services?

Scroll down a bit further; there's an old thread with the exact same title that’s absolutely massive. You'll definitely dig up an answer in there somewhere.

So, I was hoping I could get some help from you all just to clear my head a bit and make sure I'm getting everything organized correctly.
Specifically, I’m looking at these invoices for hotel reservation commissions—you know, those fees from foreign agencies like Booking.com. Since I haven't really handled this before, I'm relying on how my predecessor did things. She used to book anything from companies based here in the USA under the acquisition of goods from the USA category. But I guess I'm wondering if it might actually belong under the category for services received from the USA? The invoices clearly state they are VAT subject to reverse charge, and she would calculate the sales tax on that amount, booking it as both an input tax and a liability (using accounts like 14022/24002 and 4187/2211). That part seems fine, I suppose, but I'm just stuck on whether it should go under acquisitions or services.

My second question is about commissions from companies that aren't even based in the USA, like over in Switzerland. For those, she used to book them under the category for VAT calculations upon import, which seems okay, but I can't quite wrap my head around why only the base amount was recorded and then put under non-taxable using accounts 4187/2211.
Some of the invoices say "This invoice may be subject to reverse charge in the country of receipt," while others just show 0% sales tax.

Then there's the third thing, which involves the Visa statements for credit card processing fees. Those were also being booked under the acquisition of goods from the USA. These statements come in daily, and they mention that these specific services aren't taxable because the service is performed right here in the States. However, she would take the total from the statement and then add an extra 25% for sales tax, which went into the sales tax account, yet she only ever booked it using 4653/2211.

ironlynx said:So, I was hoping I could get some help from you all just to clear my head a bit and make sure I'm getting everything organized correctly.
Specifically, I’m looking at these invoices for hotel reservation commissions—you know, those fees from foreign agencies like Booking.com. Since I haven't really handled this before, I'm relying on how my predecessor did things. She used to book anything from companies based here in the USA under the acquisition of goods from the USA category. But I guess I'm wondering if it might actually belong under the category for services received from the USA? The invoices clearly state they are VAT subject to reverse charge, and she would calculate the sales tax on that amount, booking it as both an input tax and a liability (using accounts like 14022/24002 and 4187/2211). That part seems fine, I suppose, but I'm just stuck on whether it should go under acquisitions or services.

My second question is about commissions from companies that aren't even based in the USA, like over in Switzerland. For those, she used to book them under the category for VAT calculations upon import, which seems okay, but I can't quite wrap my head around why only the base amount was recorded and then put under non-taxable using accounts 4187/2211.
Some of the invoices say "This invoice may be subject to reverse charge in the country of receipt," while others just show 0% sales tax.

Then there's the third thing, which involves the Visa statements for credit card processing fees. Those were also being booked under the acquisition of goods from the USA. These statements come in daily, and they mention that these specific services aren't taxable because the service is performed right here in the States. However, she would take the total from the statement and then add an extra 25% for sales tax, which went into the sales tax account, yet she only ever booked it using 4653/2211.

1) Booking—that's definitely services received from the European Union.

2) Third countries—for services from places without a US headquarters, you'll record the liability and the input tax.

3) Visa—I'm not super familiar with their specific setup... who exactly is the issuer, and do they have a US Tax ID?

Carol Price4 said:1) Booking—that's definitely services received from the European Union.

2) Third countries—for services from places without a US headquarters, you'll record the liability and the input tax.

3) Visa—I'm not super familiar with their specific setup... who exactly is the issuer, and do they have a US Tax ID?

So, I guess in principle I’m just recording things the same way, except that the ones from the European Union go under received services, while those from non-member countries fall under deliveries without a local seat here in the US. Maybe someone could explain a bit more why that goes under deliveries without a local seat? And honestly, what should I even do now, since everything has been recorded incorrectly since the start of the year? These received services were taxed with the VAT form, but those deliveries without a local seat weren't because they were recorded as imports and marked as non-taxable. Should I really go back and fix all of that??

Visa became part of the SIX payment services group based in Luxembourg, but on my invoices, it says Visa New York at the bottom, so I just stick to whatever the invoice says regarding their headquarters, I suppose. It lists VAT reg.no. 15355906, but when I check it against the database, it shows up as invalid, even though the invoices state that the aforementioned services aren't taxable because the place of performance is the US. 🙏🤔🤦

ironlynx said:So, I guess in principle I’m just recording things the same way, except that the ones from the European Union go under received services, while those from non-member countries fall under deliveries without a local seat here in the US. Maybe someone could explain a bit more why that goes under deliveries without a local seat? And honestly, what should I even do now, since everything has been recorded incorrectly since the start of the year? These received services were taxed with the VAT form, but those deliveries without a local seat weren't because they were recorded as imports and marked as non-taxable. Should I really go back and fix all of that??

Visa became part of the SIX payment services group based in Luxembourg, but on my invoices, it says Visa New York at the bottom, so I just stick to whatever the invoice says regarding their headquarters, I suppose. It lists VAT reg.no. 15355906, but when I check it against the database, it shows up as invalid, even though the invoices state that the aforementioned services aren't taxable because the place of performance is the US. 🙏🤔🤦

For the USA, you use the sales tax return—you mentioned you already do that—just double-check if it's listed as a service, since you said earlier you were booking it through acquisition...

For third-party countries, you don't send a sales tax return; you just list it under services provided without a US seat on the standard tax form, covering both the liability and the credit. Check your previous tax forms to see how you handled it... if it doesn't look right, you'll have to check with your contact at the IRS to figure out how to settle it...

The PayPal VAT ID is: ATU15355906—go ahead and check, you'll find them in the IRS system.

Those are just those bank transactions that are exempt under Section 40 of the Internal Revenue Code.

Basically, you book that through a standard invoice and it's non-taxable. For example, 4653/2201.

Hey there! Has anyone ever dealt with a situation where a vendor billed them for a cancellation fee on an order they placed? I'm trying to figure out if that even belongs on my sales tax return... or if it's just a wash?

Joshua Morris2 said:Hey there! Has anyone ever dealt with a situation where a vendor billed them for a cancellation fee on an order they placed? I'm trying to figure out if that even belongs on my sales tax return... or if it's just a wash?

If the goods were already invoiced and entered into your inventory... then yes, that cancellation invoice goes right onto the Sales Tax return.
Your best bet is to coordinate with whoever issued the invoice.
If they recorded it in their inventory logs and you put it on your Sales Tax return, everything stays balanced.

Carol Price4 said:For the USA, you use the sales tax return—you mentioned you already do that—just double-check if it's listed as a service, since you said earlier you were booking it through acquisition...

For third-party countries, you don't send a sales tax return; you just list it under services provided without a US seat on the standard tax form, covering both the liability and the credit. Check your previous tax forms to see how you handled it... if it doesn't look right, you'll have to check with your contact at the IRS to figure out how to settle it...

The PayPal VAT ID is: ATU15355906—go ahead and check, you'll find them in the IRS system.

Those are just those bank transactions that are exempt under Section 40 of the Internal Revenue Code.

Basically, you book that through a standard invoice and it's non-taxable. For example, 4653/2201.

Thank you all so much. I've been recording PayPal under received services in my accounts payable and marking it as "not subject" because that field was empty, which let me start from January 1st. It felt a bit cleaner than trying to use the regular accounts payable and recording everything from January 1st after July 31st, you know? I guess I'm wondering if I should just keep doing it this way, or once I catch up on the backlogs, should I move everything to the regular accounts payable? I think I heard somewhere that everything coming from the USA or other foreign countries needs to be reported separately...🤔
And I'm also curious about that whole reporting headache; if I only have outgoing invoices for lodging, I guess I don't really have anything to do with that specific filing, right?

Hey, I could really use some help here,

Is shipping goods over to Norway actually exempt from VAT?
Like, where am I supposed to log that on the tax return—under export deliveries or somewhere else?

Thanks

Aaron Young85 said:Hey, I could really use some help here,

Is shipping goods over to Norway actually exempt from VAT?
Like, where am I supposed to log that on the tax return—under export deliveries or somewhere else?

Thanks

Under section 1.9 regarding exports—Norway isn't part of the USA🙄/

It's tax-exempt per Article 45...☕

casualorca5 said:Under section 1.9 regarding exports—Norway isn't part of the USA🙄/

It's tax-exempt per Article 45...☕

Thanks 🙂

Hey, can anyone help me out here? My company is buying goods from Germany and we're using a carrier to ship everything directly to a customer in Canada.
I’m issuing the invoice to the Canadians with the VAT exemption under Section 41 and all that stuff.
But I’m stuck on how to record the invoice for the German supplier, since the goods never actually enter the US.
I guess I don't know if I need to include this in my VAT filings or if I have to deal with Intrastat reporting?