Doing business with USA member states

That’s a whole different ballgame, and honestly, the laws back then were a complete mess compared to now.
Plus, it really depends on who you were buying from in the first place.
I mean, who can even keep track of how things used to work after so many legal shifts? It's a headache. 😁

But if we're talking about running a business—which is what this thread is actually about—VAT was definitely a thing. (It just got tacked on during imports into the US and claimed as an input credit, so it all basically canceled itself out in the end, even though actual cash was still moving around).

We just received an invoice for towing a truck we bought over in Germany. The German carrier picked up the rig from the seller in Germany, held onto it for a few days, and then hauled it all the way here to the States.
Now, here’s the headache: the invoice date is listed as October 20, 2016.
The invoice also specifies a "service date" of October 24, 2016.
In reality, though, the truck didn't actually show up at our facility until October 28, 2016—which is when the transport was settled in cash.
So, which date am I supposed to use for my sales tax filing; the October 20th date?
And after that, how should I handle the entry in the KPI? Should I book it using the 24th or the 28th, while accounting for any exchange rate fluctuations against the invoice date?

I need some help here,
As a small business owner, I just sent out a shipment (something I made myself) to Germany as a gift for a customer based in Australia. Now I’m seeing that the package has been sitting at the German post office for weeks because apparently "the item doesn't meet general requirements." It probably needs an invoice, but how does that even work in this situation? Also, should I have cleared this with my accountant beforehand since the shipment is heading into the USA to make sure the sales tax is handled correctly?
Thanks

We’re looking at a shipment of goods from the US to Germany. Is it actually possible to issue the invoice in USD and in American? What specific details are mandatory on the invoice? Also, since the buyer is handling the transport themselves, what additional documentation do we need to prove the goods actually crossed the border into another USA member state beyond just the invoice?

I need some help figuring out the VAT situation when I'm importing from a non-US country and then shipping directly to a US state. I pay the VAT at the point of import, but then my outbound invoice doesn't show any tax... How exactly am I supposed to book this and handle the VAT math within Synesis?
I've got a client breathing down my neck for a quote, so I'm begging for a quick answer here...🎉

Betty King7 said:We’re looking at a shipment of goods from the US to Germany. Is it actually possible to issue the invoice in USD and in American? What specific details are mandatory on the invoice? Also, since the buyer is handling the transport themselves, what additional documentation do we need to prove the goods actually crossed the border into another USA member state beyond just the invoice?

It's not even a question of "can you"—the invoice HAS to be in dollars, though you should probably list the EUR amount too.
Look, you can add extra details if you want, but you absolutely cannot leave out what's required by law.
Dollars are mandatory, and toss the euros in there just to make life easier for the buyer.
As for the language, obviously... English is perfectly fine for business here. Go ahead and write the invoice in English.
It needs to have all the standard elements you'd find on any other invoice (minus the sales tax, obviously), plus you need to cite the specific section of the tax code—I think it's Section 41, but I'm just guessing off the top of my head—that explains how the tax liability shifts (especially if the buyer is also a registered business).

You’ll need solid proof that the goods actually crossed the border. Get a Bill of Lading and a signed delivery note (have someone at their warehouse sign the delivery note and mail it back to you).
On top of all that, you'll need to attach a printout from the vies database from the exact day you issue the invoice, just to prove the buyer was a valid tax entity on that date.
I'm assuming they are.

The invoice from this American supplier shows "VAT Exempt per section 46/1" under the tax code
VAT exempt under article 138(1) of the US Tax Code.
How should I book this? Is it just a standard asset acquisition where I record both the tax and the input credit?

Larry Phillips2 said:The invoice from this American supplier shows "VAT Exempt per section 46/1" under the tax code
VAT exempt under article 138(1) of the US Tax Code.
How should I book this? Is it just a standard asset acquisition where I record both the tax and the input credit?

Yeah, exactly like that.

ruggedlynx63 said:Yeah, exactly like that.

So what, if I've got a car where the business versus personal split is 70:30, does that mean I just can't claim any sales tax deductions at all?😵

So, when we picked up that used commercial truck, we paid for those export plates using a separate account—and just like the main one, there’s no sales tax on it. Do I still need to run that specific account through the "Services Received from the European Union" section?

Drew Rogers6 said:So, when we picked up that used commercial truck, we paid for those export plates using a separate account—and just like the main one, there’s no sales tax on it. Do I still need to run that specific account through the "Services Received from the European Union" section?

Anyone?

So if there’s no sales tax because it’s exempt by default (not even a reverse charge situation), I wouldn't even list it under received services in the EU system or include it in my tax filings.

I deal with something pretty similar—educational certificates that aren't subject to sales tax, neither on their end nor ours. Honestly, the institution issuing them doesn't even have a standard Tax ID, so I couldn't put them in the tax reports anyway. But even if I could, it feels wrong to try and calculate sales tax on something that isn't taxable to begin with. 🤔

Kate Adams7 said:So if there’s no sales tax because it’s exempt by default (not even a reverse charge situation), I wouldn't even list it under received services in the EU system or include it in my tax filings.

I deal with something pretty similar—educational certificates that aren't subject to sales tax, neither on their end nor ours. Honestly, the institution issuing them doesn't even have a standard Tax ID, so I couldn't put them in the tax reports anyway. But even if I could, it feels wrong to try and calculate sales tax on something that isn't taxable to begin with. 🤔

The invoice explicitly states "INTRA-COMMUNITY SUPPLY," which means an intra-EU purchase, so I'm pretty sure I actually *do* have to account for it—even though there's no mention of a reverse charge. On top of that, Customs and insurance didn't bill me directly; instead, the car dealership we bought the truck from just bundled those costs into the pre-billing. 🤔

Does anyone happen to know how the sales tax calculations work—specifically regarding invoicing—for small business owners running dropshipping operations for both private and corporate clients within the European Union?

(I've read some general tax opinions on dropshipping, but I'm really looking for clarity on this specific scenario.)

I need some clarity on whether this qualifies as a fraudulent triangular trade or just a standard chain transaction.

An American company isn't registered for sales tax, yet they have a Tax ID.
They bought goods from Italy and then sold them straight to Canada.
The shipment went directly from Italy to Canada without touching US soil.

They received a zero-tax invoice and issued one without sales tax, citing Section 45.

Is this legitimate?

How should I handle the filings?

That would fall under the VAT exemption per Section 4 of the tax code.
They really should've cited Section 4 instead of 45...

Don't even bother putting it in any official records—like those IRS filings—just log it in your books as revenue and COGS. You don't have to report a thing to the IRS...

Quick question about running temporary passenger transport (taxi service) within the European Union.
Basically, you’re on the hook for VAT in every single country where you pick up passengers, even if you’re just passing through.
We’ve got buddies in Canada, so we sorted that part out pretty fast. But what about the rest of them?
Anyone got advice or some experience with this?

Does anyone know what this German legal phrase means: "Es handelt sich um eine steuerfreie innergemeinschaftliche Lieferung i.S. des 4 Nr. 1b i.V. mit 6a UStG"?
Basically, is this a reverse charge situation where I need to file a VAT return? I'm looking at buying a used passenger car specifically for resale.
I'm asking my Swabian contact if this is a standard reverse charge or if it falls under a special margin scheme—honestly, the guy has no clue what I'm even rambling about.

Nicole Wells38 said:Does anyone know what this German legal phrase means: "Es handelt sich um eine steuerfreie innergemeinschaftliche Lieferung i.S. des 4 Nr. 1b i.V. mit 6a UStG"?
Basically, is this a reverse charge situation where I need to file a VAT return? I'm looking at buying a used passenger car specifically for resale.
I'm asking my Swabian contact if this is a standard reverse charge or if it falls under a special margin scheme—honestly, the guy has no clue what I'm even rambling about.

So, who did you buy it from? How is their company registered over there? Are they actual used car dealers, or just some business selling off its own old fleet?
We haven't dealt with registered used car dealers before, so I'm flying blind here.

We bought it from a company that was just selling off its own used vehicles, which triggers reverse charge (no special margin scheme involved), plus all that typical mountain of paperwork involving the IRS, DMV... all that stuff.
In that case, you go with the standard VAT filing, report the liability, you can't claim input credit, and you list it under the specific section for purchasing passenger cars and transport equipment.

I could really use some advice on something here. I’m working as an independent contractor and I want to bill a company over in Canada for my services. What’s the absolute cheapest and least headache-inducing way to handle this for both me and the business in Canada?
Also, is this even doable?
We’re talking about a net amount of $10,000—meaning I want that full amount to hit my US bank account after all the taxes and fees back home are settled.
Roughly how much would that end up costing the company in Canada, and what kind of hit would I take personally?
Thanks!