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    1. Andreas_FGF is offline

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      #1

      German reseller buying from Singapore Based Company buying from US Company

      We are a German reseller, buying lubricants from a major oil company's branch incorporated in Singapore (that's just how they require us to do it). The US entity of this oil company is then delivering the lubes into seagoing vessels at ports all over the US. The invoice to us is then issued by the Singapore entity "for and on behalf of" the US entity.

      Now they want us to provide them with a number of US Sales Tax exemption certificates, including sales tax registration nos. for each state which we purchase lubes in, otherwise they claim they have to charge us sales taxes for each delivery.

      Does anyone have an idea if this is correct?

      The vessels the lubes are supplied to are all seagoing vessels, so if deliveries were made to the end users (ship owners), they would be exempt based on providing information that the respective next port is outside the US and the lubes are all consumed in international waters.

      Thanks a lot in advance for any feedback on this!
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    2. WholesaleMod's Avatar
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      #2
      Hi Andreas,

      Welcome to Wholesale Forum

      It sounds odd, aren't the shipping companies already registered for sales tax exemption? Do the invoices specify the name of the shipping companies as the recipients of the shipments? Or do the invoices bear the US entity or Singapore company name?

      What are the US States where the ports are located?
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    3. Andreas_FGF is offline

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      #3
      Hi WholesaleMod,

      Thanks for the warm welcome and speedy response!

      As for the shipping companies, these are basically German shipowners, a few of them will be registered in countries like Panama, Antigua&Barbuda, Gibraltar etc. but only for tax reasons. I firmly believe that none of these companies has ever worried about registration for anything in the US, they are just re-supplying their vessel with lubes, spares, provisions etc.

      As for the invoices to us, these are issued by the Singapore company, but they clearly state in the letterhead that (for these deliveries in US, as opposed to every other country in the world) they issue the invoices for and on behalf of the US company.

      The shipping companies are not mentioned on the invoices, at most only a vessel name would appear (but this is not actually a unique identifier...). Apart from that, our company is the sole recipient of goods & invoice from documentation perspective.

      We only have our headoffice in Germany, and no other office anywhere else in the world. We do not intend to change that.

      The states where the deliveries are done are primarily Texas, Mississippi, Missouri, Illinois, Florida, but every now and then also California, Washington, New York. We can also not exclude any of the other coastal states for the future, since we never now where their trade routes lead our customer's vessels to.

      If you have any further questions I will be glad to answer them, I am grateful for any advice I may be able to get on this!

      Thanks!

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      #4
      Hi Andreas,

      Try contacting the Singaporean company first, and ask them to confirm in which state their US entity is based. It is their state that will want to confirm tax exemption, which you can obtain from that State's Revenue Department by applying for sales tax exemption. Have a look at the following link to find all the United States Revenue Departments websites by state:The Singaporean company should be able to provide you with the same documentation that will entitle you to sales tax exemption, pre-filled with the US entity's details. See for example how the following company offers links to pre-filled exemption certificates by state for their buyers:
      Another option is to pay the sales tax and then reclaim it back following the standard US export procedures.

      Hope this helps

    5. Thank you for this post:

      Andreas_FGF (30 Jul 2012)

    6. bbtiger is offline

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      #5
      should ask assistance from singapore company

    7. Andreas_FGF is offline

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      #6
      Hi WholesaleMod,

      Thanks for the response and additional resources you provided. If I get this right, the oil company is actually correct in requesting us to provide them with exemption certificates?

      What I have trouble understanding:

      You write that it would be the state where the US entity is based in that would want to confirm tax exemption. Then you mention pre-filled exemption certificates for every state... Will it be one state or several states where we would have to claim exemption?

      Then, some of the forms on the site you linked to look similar to what I have seen already, but require to fill in registration numbers/seller's permit numbers. This would mean that we would actually have to register our company in the US, or rather form a new company based somewhere in the US? Or is there an easier way to get around this?

      I am especially worried about cost involved with this, and future obligation like e. g. tax return filings that arise from this, which I imagine as being quite an administrative hassle for us.

      Hope I am not bothering you too much with my lack of knowledge, this is just a completely new topic for me.

      Thanks!!!

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      #7
      Hi Andreas_FGF,

      Quote:

      If I get this right, the oil company is actually correct in requesting us to provide them with exemption certificates?
      Yes that is correct, however we suggest asking the Indonesian company if they can supply you with the correct certificates. Based on their previous experience with other international buyers, they should be able to provide you with more details about the specific certificates they need.

      Quote:

      You write that it would be the state where the US entity is based in that would want to confirm tax exemption. Then you mention pre-filled exemption certificates for every state... Will it be one state or several states where we would have to claim exemption?
      This depends whether you will be buying from multiple US entities based in different states. Every state has its own exemption certificate form, therefore if you are buying from both a Texas and a New York based entity, you will need an exemption certificate for each of the two states.

      Quote:

      Then, some of the forms on the site you linked to look similar to what I have seen already, but require to fill in registration numbers/seller's permit numbers. This would mean that we would actually have to register our company in the US, or rather form a new company based somewhere in the US? Or is there an easier way to get around this?
      We suggest first to understand from which states you will be buying your oils, then you can contact the state revenue departments for those states to find out how to obtain a sales tax ID number for foreigners (Without having to incorporate in the US). Every US state has different legislation regarding foreign wholesale buyers and state sales tax.

      Once you have filed exemption certificates for all the states you will be buying your stock from, you shouldn't have any other US administrative work to worry about. Remember that Import duty and taxes will be due in Germany when importing goods into Germany from outside of the EU.

      Hope this helps

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