Quote:
Originally Posted by Robbie
"local tax authority"?
Are you referring to state income tax?
I'll have to check into that.
We certainly haven't had any "pressure" from our "local tax authority" yet. But knowing how the govt. works it would not surprise me.
Just not sure why a "tax authority" would want a company to have invoices on file. They already have w-9 forms on all affiliates.
|
I am referring to companies in Europe and their local tax authorities.
Companies in Europe need the correct documentation for all funds leaving their business.
Correct documentation means invoices with the correct legal identity and address, VAT number if applicable, and the reason for the payment.
If you do not have all of this in place when you get an audit then the tax authority can assume that the payments you are making are not legitimate business expenses. They can then assume that you are a) paying the money to yourself and you need to pay more personal income tax, or b) the company is paying the money to itself to avoid additional corporate taxation.
Either way if you do not have the correct documentation to hand it can be a very difficult process.
So you will see more European companies putting their house in order because the tax enforcement situation in Europe is changing. Just because a company has never asked for this before does not mean there is anything sinister happening.
However the smarter companies realise that our American friends tend to find raising an invoice a bit "taxing". So we take your details once, and then automatically create the invoice in house whenever a payment is due.
This method would probably be frowned upon by a tax inspector, but it saves your company from the gfy hoard labelling you a "scammer" or a "shady program".
