Doing business with USA member states

Betty King7 said:Are we issuing the invoice in dollars or what?

Under Section 81 of the Tax Code...:
Invoice amounts must be stated in USD, though you can include any other currency alongside it for convenience.

Not sure if this is the right thread, but I need some help.
I made a payment in the USA from my USD account for 1,000 Euros—just a standard conversion.
On my USD statement, it shows up as $2500. It was for a security deposit. Anyway, the deposit has been returned, but my Euro account is sitting at 990 Euros. A German client sent 1,000, but I guess there was a 10 Euro fee somewhere.
How am I supposed to book this mess... any advice would be appreciated.🙏

vividotter912 said:Not sure if this is the right thread, but I need some help.
I made a payment in the USA from my USD account for 1,000 Euros—just a standard conversion.
On my USD statement, it shows up as $2500. It was for a security deposit. Anyway, the deposit has been returned, but my Euro account is sitting at 990 Euros. A German client sent 1,000, but I guess there was a 10 Euro fee somewhere.
How am I supposed to book this mess... any advice would be appreciated.🙏

Post the deposit to the same account where you recorded the initial $7,500 outflow. For the Euro account, record the 1,000 Euros using the exchange rate from the day it hit the account. That difference between the two is your foreign exchange gain/loss. Then, just book the bank fee using the daily exchange rate—either under 4xxx/10xx or 220/10xx if your bank sends a separate invoice for those fees.

Ryan Rogers4 said:Post the deposit to the same account where you recorded the initial $7,500 outflow. For the Euro account, record the 1,000 Euros using the exchange rate from the day it hit the account. That difference between the two is your foreign exchange gain/loss. Then, just book the bank fee using the daily exchange rate—either under 4xxx/10xx or 220/10xx if your bank sends a separate invoice for those fees.

I didn't quite follow you...
So, when I paid via the statement, I debited the vendor and credited the account for that $7,500 amount.
Now they're refunding me, but the money isn't hitting my USD account—it's going into the foreign currency account.
Should I open a new sub-account, like 1001, and record the debt using the Fed mid-rate, or what...(please, just give me a workflow) I get the part about exchange rates, thanks.🙂

vividotter912 said:I didn't quite follow you...
So, when I paid via the statement, I debited the vendor and credited the account for that $7,500 amount.
Now they're refunding me, but the money isn't hitting my USD account—it's going into the foreign currency account.
Should I open a new sub-account, like 1001, and record the debt using the Fed mid-rate, or what...(please, just give me a workflow) I get the part about exchange rates, thanks.🙂

It doesn't matter that it wasn't in the same account. My foreign currency account is 1030.
Then just book it like this:
1030/- the $1,000 amount at the mid-market rate on the day of the refund ($2533)
-/2210 (Vendor) $2500
-/77xx $33 (Exchange difference)
4xxx/1030 75.99 (the $10 amount x Federal Reserve mid-market rate) if the bank doesn't send separate fee invoices, or
2200/1030 75.99 if the bank does send fee invoices.

Don't let it trip you up—just because you paid from one account and the money came back to another doesn't change anything. It's all your money.🙂

Ryan Rogers4 said:It doesn't matter that it wasn't in the same account. My foreign currency account is 1030.
Then just book it like this:
1030/- the $1,000 amount at the mid-market rate on the day of the refund ($2533)
-/2210 (Vendor) $2500
-/77xx $33 (Exchange difference)
4xxx/1030 75.99 (the $10 amount x Federal Reserve mid-market rate) if the bank doesn't send separate fee invoices, or
2200/1030 75.99 if the bank does send fee invoices.

Don't let it trip you up—just because you paid from one account and the money came back to another doesn't change anything. It's all your money.🙂

Thanks, dear.😉

I'm issuing an invoice for construction services performed in Mexico.

What exactly should I include in the notes:
the service is not taxable under Section 19 of the Tax Code, or
the tax liability is transferred per Section 19...

I know the invoice needs to be in dollars, but if I want to show the amount in euros as well, do I just use
the mid-market exchange rate?

I'm confused again, so I need some help.
I have an invoice from the USA dated 10/23/2015 (invoice date)
It was paid on 10/20/2015.
When recording the incoming invoice, which mid-market exchange rate should I use...
The rate from 10/20 when the payment went out, or 10/23 from the invoice date?🙂

vividotter912 said:I'm confused again, so I need some help.
I have an invoice from the USA dated 10/23/2015 (invoice date)
It was paid on 10/20/2015.
When recording the incoming invoice, which mid-market exchange rate should I use...
The rate from 10/20 when the payment went out, or 10/23 from the invoice date?🙂

The invoice date.

Just wanted to run this by you guys to see if I'm on the right track

We handled a transport job over in Germany for a German company. I billed them without sales tax, just added a note about the reverse charge mechanism.

The thing is, we couldn't get everything sorted on our own—it was a total mess—so a colleague had to jump in and help us out, and he issued us an invoice that *does* include sales tax. Is that actually okay? Thanks!

I could really use some help if anyone’s been through this before.

So, I've got this supplier over in Germany asking me for our specific legal structure. See, we operate as a sole proprietorship here in the States, but their VAT identification system doesn't seem to have a category for a simple sole proprietor. Instead, their system just lists a million different options like corporations, LLCs, partnerships, public companies, joint ventures, and who knows what else... I'm honestly kind of lost on what to tell them or how we should even be categorized in their eyes. :/ Anyone have any ideas?

All he really cares about is whether you have a valid Tax ID or not—he just needs to be able to run it through the system... just give him the number, and once he checks it, all his info will pop up right there so he can write down whatever he needs...

They’re probably just trying to get you logged into their system under some specific category or assign you a certain vendor status or whatever.
Just scan your business license or whatever paperwork you have as a small business owner and send it over so they can handle the translation themselves.

Aaron Young85 said:I could really use some help if anyone’s been through this before.

So, I've got this supplier over in Germany asking me for our specific legal structure. See, we operate as a sole proprietorship here in the States, but their VAT identification system doesn't seem to have a category for a simple sole proprietor. Instead, their system just lists a million different options like corporations, LLCs, partnerships, public companies, joint ventures, and who knows what else... I'm honestly kind of lost on what to tell them or how we should even be categorized in their eyes. :/ Anyone have any ideas?

I just told them we're a Business. Since their database pulls up both the owner's full name and the business name, when they send over an invoice, it shows the First and Last Name first, and then right underneath it says Tajit business.

Drew Rogers6 said:Just wanted to run this by you guys to see if I'm on the right track

We handled a transport job over in Germany for a German company. I billed them without sales tax, just added a note about the reverse charge mechanism.

The thing is, we couldn't get everything sorted on our own—it was a total mess—so a colleague had to jump in and help us out, and he issued us an invoice that *does* include sales tax. Is that actually okay? Thanks!

Anyone there?

vividotter912 said:I'm issuing an invoice for construction services performed in Mexico.

What exactly should I include in the notes:
the service is not taxable under Section 19 of the Tax Code, or
the tax liability is transferred per Section 19...

I know the invoice needs to be in dollars, but if I want to show the amount in euros as well, do I just use
the mid-market exchange rate?

🐔

Hey there!

I could really use some help here... So, we bought some tires online here in the States, but now the invoice is arriving and it shows a Canadian company listed, yet it includes a US Tax ID: HRXXXXXX
And they charged me the full 25% sales tax... I guess that means they’ve crossed the threshold for deliveries within the US.
How am I supposed to book this as a standard purchase? Do I just claim the sales tax and call it a day...? And do I need to list this separately on my tax filings??

You’re booking it just like you bought it from some local US corporation since they’re already registered for tax purposes here.
Just make sure you double-check whether you can actually claim that sales tax credit or not.

ruggedmaker2 said:You’re booking it just like you bought it from some local US corporation since they’re already registered for tax purposes here.
Just make sure you double-check whether you can actually claim that sales tax credit or not.

okay... thanks!

Drew Rogers6 said:Anyone there?

Invoiced to an Austrian taxpayer... reverse charge applies under Section 17.
The invoice from an American carrier to you is treated like any other domestic bill: it includes sales tax.