Re: [ALCTS-acqnet] Question about taxes - foreign vendors

Hi Julie,

I'm not sure if the following explanation applies to what is happening to
your payments vis a vis "international tax" but I write to show that
something similar happened to us when paying an overseas vendor via wire
transfer.  Actually I don't believe the fact that the payment was made by
wire transfer is the reason, but rather something else. Note that the cost
of the wire transfer did not figure in to what the Library paid for the
items + postage. Read on.

This recently happened to us when paying a foreign vendor .  Here is the
quote from our Business Office when explaining why the initial charge of
$815.00 for the items and potage grew to $1,164.29 (!):
*"...we noted that the invoice stated that the amount (due) was, "the
amount xvendor will receive after any tax deduction if it applies".
Unfortunately, this payment is subject to non-resident tax withholding of
30%.  So, while xvendor received the $815 requested, the amount  which will
be expensed to your department will be $1,164.39."*

I couldn't figure out how the Bus. Office came to their final figure, asked
for an explanation and got the following response:

*Since xvendor invoice stated that the $815 should represent the amount
received after any tax deduction is applied, we had to "gross up" the true
payment amount. In essence, what they're saying is that we have to
calculate the price of the films and shipping based on the tax rate in
order to ensure that xvendor receives $815 cash. It results in some algebra
on our part, but thankfully it's fairly easy. Since the 30% tax rate
applies, then the $815 represents the remaining 70% after the tax is
withheld. Thus, an easy way to calculate what our cost is to take the
amount on the invoice and divide it by 0.70.*

*In this case, this calculation yields us a price of $1,164.29. 30% of that
is* *$349.29, which nets to the payment of $815 to xvendor*

Please let me know if you have any questions.

Thank you.
-Carol



On Wed, Feb 6, 2019 at 6:54 PM "Loder, Julie L" <acqnet_at_lists.ala.org>
wrote:

> Hello,
>
>
>
> Our university is now paying foreign vendors without a U.S. Bank via WIRE
> only. As part of this process, someone in Finance is calculating
> “international tax” withholding. In all the years I have worked in
> Acquisitions, I have never heard of this happening for library materials. I
> am trying to find out more about this process and have a meeting setup with
> that department, but would like to know if anyone in the community has
> experienced this situation.
>
>
>
> Thank you
>
>
>
> Julie
>
>
>
> Julie Loder
>
> Director, Acquisitions & Eresources
>
> Vanderbilt University
>
> Jean & Alexander Heard Library
>
> 110 21st Avenue South
>
> Suite 700 Baker Bldg
>
> Nashville, TN 37203
>
> julie.loder_at_vanderbilt.edu
>
> 615-343-5879 (voice)
>
> 615-343-8834(fax)
>
>
>


-- 

*Carol Kornhauser*

Receipts Specialist & Budget Coordinator

*Shadek-Fackenthal Library*

carol.kornhauser_at_fandm.edu

*p. *717-358-3841 | *f. *717-358-4436

*USPS Mailing Address*
*Franklin & Marshall College*
*Library Acquisitions*

P.O. Box 3003

*Lancaster, PA 17604-3003*

*FedEx/UPS/Airborne/DHL Mailing Address*

*Franklin & Marshall College  *
Library Acquisitions

415 Harrisburg Avenue

*Lancaster, PA 17603-2615*


.לִמְנוֹת יָמֵינוּ, כֵּן הוֹדַע;    וְנָבִא, לְבַב חָכְמָה

So teach us to number our days, that we may get us a heart of wisdom.