AGENCY TAX SUMMARY FOR THE EC
RecruitiFi is outside the scope of the EC VAT. Payments from RecruitiFi will not include VAT, nor does the Agency need to remit VAT payments.
Why?
EC VAT determines place of supply by the location the customer receives the services. Refer to the section Supply of Services for more details.
RecruitiFi is located in the U.S., and has no locations in any EC Member State.
Agencies are providing the services to RecruitiFi in the U.S., and not to the client directly, so the services are "outside the scope of EC VAT."
But I have a contract with the Employer, and they're in the EC. Shouldn't I be charging VAT to the Employer?
No. Technically, Agencies are not directly contracted with any Employers. The Employers are contracted with RecruitiFi and pay RecruitiFi for the services. All Agencies are also contracted with RecruitiFi, and RecruitiFi pays the Agencies as consultants.
Even if an Employer and an Agency had a prior relationship, the RecruitiFi Terms supersede their previous contracts for the duration of their engagement through RecruitiFi.
Whether the Employer is located in the EC does not factor into the tax situation.
Since I'm providing the services in the U.S., is there U.S. sales tax?
As mentioned, local sales and service taxes still apply in the place where those services are received. All Agency services are received by RecruitiFi in New York state. Services are not taxed in New York, so there is no need to collect or pay local sales tax in the U.S.