Amy's International tax

  Indirect tax (i.e., VAT) concern was raised when the US entity place the Purchase Order (PO) to Italian supplier under FCA (or FOB) term for direct shipment to the customer in Qatar (also F-term) where the customer collect in Italy where the US entity does not have an indirect tax registration.  To resolve this issue, there are two proposed solutions.  (1) between the EU supplier -> US entity: EU supplier can only apply 0% VAT for export, if either EU supplier or the US entity arranges the transport outside EU. If end-customer collects, EU supplier should charge local VAT (2) US entity -> non-EU end-customer: If EU supplier or the US entity arranged the transport outside EU, then the US entity sale is outside the scope of VAT. If end-customer collects, the US entity should strictly speaking VAT register locally, i.e. Italy in this case. <=> From a VAT perspective, we should use a C or D Incoterm (but not DDP) to avoid the risk in Italy. Based on the above in...

 Intercompany netting between US and Mexican affiliates and how it relates to applying the zero-rate VAT (IVA - Impuesto al Valor Agregado) in Mexico. 1. What is Intercompany Netting? Intercompany netting is essentially a financial process used by multinational companies to manage and settle mutual debts between their various subsidiaries or affiliates. Instead of each entity making separate payments for every single invoice owed to another related entity, they:   Calculate the total amount each entity owes to others within the group. Offset these amounts against each other. Only pay the final net difference. For a US parent and a Mexican affiliate: The Mexican affiliate might owe the US parent for management fees, royalties, or imported goods. The US parent might owe the Mexican affiliate for manufactured goods, services rendered (like IT support, call center operations, maquila services), etc. Through netting, they determine the net amount owed and by whom, resulting...