Client is a US-based artist. Client is about to enter into a
transaction to sell three pieces to Netherlands resident. Sales
price might be about $140k US. Historically, sales have gone
through galleries who handle these issues.

Does Client have an obligation to collect (and pay) VAT? If so,
how does Client remit it? Where? Is 20% the correct rate?

If there is no obligation to collect (or pay) VAT, why? I'd like
to put it in my file and have Client retain a copy in their file
in case the matter comes up.

It looks like there may be a registration requirement if sales
exceed $85k euro. If this is true, can Client avoid registration
be entering into three separate transactions for the three pieces?
Or is this going to trigger some version of "structuring"?

What other things should I be worried about?
--
Bruce Davidson Cantor, CPA, JD
Admitted in Colorado

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According to bc <cantor2@ix.netcom.com>:

Client is a US-based artist. Client is about to enter into a
transaction to sell three pieces to Netherlands resident. Sales
price might be about $140k US. Historically, sales have gone
through galleries who handle these issues.

Does Client have an obligation to collect (and pay) VAT? If so,
how does Client remit it? Where? Is 20% the correct rate?

How is the client planning to deliver the paintings? If the buyer
comes to the US and takes them home, the VAT is the buyer's problem.
If your client is planning to ship them or take them himself, the VAT
is your client's problem, because the paintings aren't going to get
out of customs until the VAT is paid. If the purchaser is a Dutch
business there is a provision for reverse-charging VAT but it doesn't
sound like that is the situation here.

Given the size of the sale, I would suggest finding a customs agent
that understands this stuff. It won't be free, but it's better than
getting $140K of art stuck in customs. I don't know whether your
client will have to register for Dutch VAT but if he does, it's a
bunch of paperwork but it's not expensive. It might be a good idea if
he expects to sell art to other people in the EU since he should be
able to use a Dutch VAT account to import anywhere in the EU.

By the way, I think the VAT on fine art is 9% but the customs agent
would know that.

--
Regards,
John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

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<< The foregoing was not intended or written to be used, >>
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<< that may be imposed upon the taxpayer. >>
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On Thu, 17 Feb 2022 00:15:08 EST, "John Levine" <johnl@taugh.com>
wrote:

According to bc <cantor2@ix.netcom.com>:

Does Client have an obligation to collect (and pay) VAT?

How is the client planning to deliver the paintings? If the buyer
comes to the US and takes them home, the VAT is the buyer's problem.
If your client is planning to ship them or take them himself, the VAT
is your client's problem, because the paintings aren't going to get
out of customs until the VAT is paid. If the purchaser is a Dutch
business there is a provision for reverse-charging VAT but it doesn't
sound like that is the situation here.

Client shipped the art to the Netherlands as "presentation
materials" because he was intending to show them, not sell them.

By the way, I think the VAT on fine art is 9% but the customs agent
would know that.

I saw a note about that, yesterday evening.

I have a call scheduled with an Avalara representative tomorrow
morning. Perhaps he will finally be able to shed the necessary
light on what to do now.
--
Bruce Davidson Cantor, CPA, JD
Admitted in Colorado

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

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