The simple use of a computer as a tool to perform a professional service is not an information processing service. For example, the use of a computer and CAD software (computer-aided design) by an architect in the preparation of original construction plans is not a data processing processing. Similarly, an accountant does not provide taxable data processing services when he or she uses knowledge of accounting standards to establish financial statements, balance sheets or profit or loss accounts, or to prepare federal tax returns, government tax returns or government VAT returns, even when this work is done on a computer. Companies that sell services in several states need to know where these services are subject to VAT. The fact that VAT laws often change makes it difficult to agree. Under a separate contract, you give your suppliers resale certificates, instead of paying taxes on materials you include in the customer`s property and on certain services when the service charges are identified separately for the customer. These services are surveying, landscaping, final cleaning and safety systems integrated into the client`s reality. You then collect state VAT plus your client`s local tax on the amount you charge for materials and services. Your cost for materials should be at least as high as you paid for it. Construction costs are not taxable. If your contract is with an exempt organization, you can issue an exemption certificate to your suppliers instead of paying VAT: navigating vat rules and regulations is a challenge and syphons resources from more profitable activities. Automation of VAT compliance helps businesses stay on the path to success.
In some countries, companies must collect VAT on services provided in the context of the sale of physical goods. Rehabilitation, restoration or redevelopment of non-residential real estate does not include the addition of new usable surfaces per square metre or scheduled and regular maintenance. Most states now require some non-state sellers to register with the tax authorities and then collect and transfer VAT. It is difficult to know which states need which companies. It depends on nexus – the link between a company and a state that triggers a VAT collection obligation. For companies that sell goods or services in several states, it is particularly difficult to know what the rate is applied and what the applicable VAT rules are. There are no health states that have the same VAT laws. Services provided by a transmission and distribution company are taxable when they are transferred or delivered directly to a final customer whose electricity consumption is subject to revenue tax.
In addition to the aforementioned taxable services, other types of sales, which can generally be considered „services,“ are taxable, such as the sale, processing or transformation of physical personal property. If you are repairing or rebuilding non-residential real estate, you should levy state VAT, plus local tax on your total charge for the contract.