New Visa rules (begin) - GoFuckYourself.com

retalie77 · 01-02-2003, 05:32 PM

Electronic Commerce
(i) Additions to Rules of determine Electronic Commerce Merchant Location
(ii) Changes of Cross-Border Acquiring Rules

In brief:

Rules are announced that determine where a Transaction takes place in the virtual environment. With the proliferation of third-party entities helping online sellers accept payment cards on the Internet, Visa has adapted its rules, which will better reflect the new business models while reinforcing Member obligations and responsibilities.

Cross-border acquiring restrictions are revisited in the light of these new requirements.

The Member acknowledges that the information contained in this Letter is confidential to the intended recipient (the Member) only and the Member agrees that it will not use or disclose, or allow to be used or disclosed, any information supplied by Visa which the Member has received without the prior written consent of Visa. The Member agrees that it will use all its best endeavours to prevent the unauthorised use or disclosure of such information to any third parties.

(i) Merchant Location

BACKGROUND

In the physical world, the location of a Merchant Outlet determines the country where the Merchant must deposit its Transactions, which Acquirers may contract with it, and which domestic, regional, or interregional rules apply to the Transactions it generates. Until now, a Merchant Outlet was defined as ¡§the physical premises of the Merchant at which a Transaction is completed.¡¨

Since this description does not address the online environment, Visa has developed a set of criteria to help Members and Merchants determine a remote Merchant Outlet¡¦s location.

The new criteria expand the current rules for Mail/Phone Order (MO/TO) and Electronic Commerce Merchants, stipulating that a Transaction takes place at the Merchant Outlet, regardless of the Cardholder location at the time of the Transaction.

Approved Operating Principles

1.0 Merchant Outlet

The definition of Merchant Outlet has been expanded by adding the italicised text:

Merchant Outlet: The physical premises of the Merchant at which a Transaction is completed. Effective 01 January 2003, an Electronic Commerce or Mail/Phone Order Merchant Outlet is located in the country where all of the following conditions occur:

?Ï There is a permanent establishment through which the economic activity (i.e., relevant Visa Transactions) is completed.

?Ï The Merchant has a local address for correspondence and judicial process.

Note:
A Post Office Box or mail forwarding service does not meet this requirement.

?Ï The Merchant holds a valid business license for the Merchant Outlet.

?Ï The Merchant Outlet pays taxes related to the sales activity.

In case of dispute, Visa reserves the right to determine a Merchant Outlet¡¦s location based on an evaluation of the Merchant¡¦s business model and any other available information. Visa reserves the right to request from the Member necessary documents for determination a Merchant Outlet¡¦s location. Visa¡¦s decision is final. As in the physical world, a single Merchant can have multiple Merchant Outlets that may be located in multiple jurisdictions.

2.0 Website Requirement

To minimise Cardholder confusion, the existing requirement that a Merchant declare its country of domicile on its Websites is revised effective 01 January 2003, to require that the country of domicile of the Merchant Outlet location be clearly disclosed to the Cardholder immediately prior to completion of payment instructions.

MEMBER IMPACT

Acquirers must incorporate these criteria into their procedures and policies for evaluating prospective Merchants. In addition, Acquirers must review existing Merchants to ensure compliance with these requirements.

All Merchants are required to display the Merchant Outlet country of domicile to the Cardholder immediately prior to completing payment instructions. In accordance with current rules governing Merchant Agreement requirements, an Acquirer must include this provision in its Electronic Commerce Merchant Agreements.

(ii) Changes of Cross-Border Acquiring Rules

Effective 01 January 2003 the Principles governing Member jurisdiction are reviewed to assist Members in determining their jurisdictional rights to sign Electronic Commerce Merchants. The rules for signing a traditional ¡§brick-and-mortar¡¨ Merchant, as specified in the Visa International Operating Regulations, Volume 1 ¡V General Rules, Section 4.2.A.2 Cross-Boarder Merchant Contracting, also apply to Electronic Commerce Merchants, and reflect a fundamental principle of the worldwide system: Visa Program development within any country is best achieved through the participation of indigenous institutions within that country.

Electronic Commerce Merchants may only be signed by a Member within the country jurisdiction to acquire E-commerce Transactions. Member should not sign with any Electronic Commerce Merchants outside a Member jurisdiction. Visa may impose a special schedule of fines for any willful violation of this requirement.

Jurisdiction and Multiple Merchant Locations

The Visa International By-Laws and Regional Boards Delegations specifies the jurisdiction of a Member. It states that ¡§the jurisdiction of a Member is limited to the country (including territories and possessions thereof) where it has its principal place of business¡K¡¨ For example, if a Member¡¦s principal place of business is in the United States, the Member may sign Merchant Outlets that are located in the United States and its territories, such as Guam, Puerto Rico, and the US Virgin Islands.

However, a territory may be part of another Visa Region. Therefore, Members must be aware of, and comply with, any additional requirements, including the payment of any fees imposed by the applicable Regional Operating Regulations. Some Merchants, however, have locations in more than one country, and may only be signed by a Member with the jurisdictional right to acquire Transactions in that country.

Merchant Qualification Standards

Before signing any Merchant, an Acquirer or IPSP, as specified in the Visa International Member Letter IML # 13/02, acting in accordance with the new IPSP requirements must determine that a prospective Merchant is financially responsible and will abide by the Visa International and Regional Operating Regulations, as well as applicable local law. This includes ensuring that the Merchant is bona fide, legitimately doing business in the country it declares as its business location.

An Acquirer or IPSP should exercise particular diligence when investigating a remote or electronic commerce entity to confirm the country location of an Electronic Commerce Merchant. Visa reserves the right to request from the Member necessary documents for additional investigation Electronic Commerce Merchant especially in the event that the Merchant has a significant volume transaction or a high level of chargeback. As described in part (i) of this letter, the following information must be associated with the same country:

?Ï Information available on the Merchant¡¦s Website (i.e., where does the Merchant claim it is located and where does the Merchant declare its choice of law?)

?Ï Information provided by the Merchant on its application forms as to its physical address (must be a physical address, not a P.O. Box or mail- forwarding service)

?Ï Physical premises (a ¡§permanent establishment¡¨) where staff that support sales activity for the goods or services being sold is located.

?Ï Business license (what governing authority issued the license for the Merchant to legally conduct business)

?Ï Where the taxes associated with the sale of goods and merchandise are paid.

Additionally, Acquirers and IPSPs must ensure that the Merchant or Sponsored Merchant is financially sound, e.g., by reviewing credit reports, obtaining a detailed business description, etc. Such investigations could also be extended to the Merchant¡¦s agents, such as supplier and fulfillment partners. The majority of these factors apply to MO/TO Merchants.

Examples

Examples are provided in the Attachment, ¡§Determining Merchant Location for Remote Merchants.¡¨

As illustrated in the examples, the location of a Merchant's headquarters has no bearing on evaluating an Acquirer's right to acquire Transactions from a particular Merchant Outlet; Acquiring rights are related to the location of the individual Merchant Outlet. Note that, for Electronic Commerce Merchants, the country where the Website is registered is merely a possible indication of a Merchant Outlet's country. A Member must consider all relevant factors in determining the location of a particular Merchant Outlet. Non-Member Agents and IPSPs are bound by these jurisdictional requirements and may only solicit Merchant Outlets within the jurisdiction of their acquiring Members.

retalie77 · 01-02-2003, 05:33 PM

Exceptions

The Visa International By-Laws and Regional Boards Delegations allows some exceptions, commonly referred to as ¡§grandfather clauses,¡¨ to these rules for charter Members. Additional exceptions are allowed, under specific conditions, for Members that maintain foreign branches. Details are found in the Visa International By-Laws and Regional Boards Delegations, Section 2.10, Jurisdiction. In addition, an Acquirer may sign a Merchant Outlet that is:

?Ï Located on a military base overseas

?Ï An overseas embassy or consulate representing the Acquirer jurisdiction

?Ï An International Airline, as specified in the Visa International Operating Regulations, Volume I? General Rules, Section 4.3.C.

Additional exceptions may be allowed within specific Visa Regions according to Regional Operating Regulations.

Cross-Border Acquiring Versus Transaction

Currency Cross-border acquiring ¡X signing a Merchant Outlet in another country ¡X is often confused with processing Transactions in a different currency. Operating Regulations allow an Acquirer or its Processor to process Transactions in multiple currencies. Therefore, a Merchant located in the EU, with the contractual approval of its Acquirer, and assuming not otherwise prohibited by applicable law, may advertise and sell merchandise in a non-local currency, e.g., in Japanese yen rather than euros. The Merchant's Acquirer then clears those Transactions through VisaNet in yen. In this example, the Merchant is not a Japanese cross-border Merchant but, rather, an EU Merchant completing Transactions in yen. Even though a Merchant does not have a physical store, Acquirers and IPSPs still must investigate the Merchant's business and business practices. The Merchant's Website must be inspected to find out answers to questions, such as:

?Ï Is the Merchant's identity and location clearly indicated?

?Ï Are the products and services offered clearly indicated?

?Ï Are the total costs, including shipping, handling, and applicable taxes, clear to the Cardholder?

?Ï Is the Transaction Currency clearly indicated?

?Ï Are the Merchant's shipping practices clearly indicated?

?Ï Can the Cardholder determine when to expect the merchandise?

?Ï Is the Merchant's return policy easily accessible and understandable?

?Ï Does the Cardholder have to expressly accept the Merchant's return policy before completing the Transaction?

?Ï Is a customer service phone number or e-mail address clearly available for Cardholders to resolve disputes (and do phone numbers include a country code)?

?Ï Does the Merchant confirm the sale via e-mail after the order has been placed?

?Ï Does the Merchant keep the Cardholder notified of the shipping status of ordered goods?

?Ï Is the name and country that will appear on the Cardholder statement easily recognizable to the Cardholder as that on the Website?

Because of the dynamic nature of the Internet and other emerging environments, Members are encouraged to review the Visa International Operating Regulations routinely to check for new rules governing the electronic commerce environment.

[end]

Candyman69 · 01-02-2003, 05:33 PM

someone sum this shizzo up =)

WiredGuy · 01-02-2003, 05:35 PM

Someone want to summarize that to clarify what are the new rules for the taxation rule. I've been going by physical address but I'm too lazy to read all that.

WG

Theo · 01-02-2003, 05:37 PM

who are you retalie77? I assume this is not just an informative post and something else will follow (or was supposed to follow).

Kimmykim · 01-02-2003, 05:52 PM

Like a request to the board admins for the users ip and other login info?

If you're going to post something you shouldn't, at least cut off the part that says you shouldn't...

"The Member acknowledges that the information contained in this Letter is confidential to the intended recipient (the Member) only and the Member agrees that it will not use or disclose, or allow to be used or disclosed, any information supplied by Visa which the Member has received without the prior written consent of Visa. The Member agrees that it will use all its best endeavours to prevent the unauthorised use or disclosure of such information to any third parties."

twistyneck · 01-02-2003, 05:54 PM

Quote:

Originally posted by Kimmykim
Like a request to the board admins for the users ip and other login info?

If you're going to post something you shouldn't, at least cut off the part that says you shouldn't...

"The Member acknowledges that the information contained in this Letter is confidential to the intended recipient (the Member) only and the Member agrees that it will not use or disclose, or allow to be used or disclosed, any information supplied by Visa which the Member has received without the prior written consent of Visa. The Member agrees that it will use all its best endeavours to prevent the unauthorised use or disclosure of such information to any third parties."

Sorry KK but that's what message boards are for.

Chris Mallick · 01-02-2003, 06:05 PM

These are the rules that went into effect November 15th for Visa USA. All other Visa Regions seem to be required to follow these rules effective yesterday. This is not new news nor are these new rules.

Chris
CEO EPOCH

x582 · 01-02-2003, 06:07 PM

It says :

1.
You must do business with an IPSP in your region.

1.2
You region is defined by where is your PRINIPAL/MAIN office located.

1.3
If you have multiple offices - The office where your staff, your marketing activities, "the mind and management" of your operations are located, will determined your region.

2.
You have to pay income tax at the location you are conducting business.

(If you are a foreing webmasters and you have incorporated in the USA to comply with Visa new Regulations - you'll have to file annual tax return to the IRS. You will pay tax on your net income (revenue less deductible expenses). If you are paying dividensd to yourself in your home country, you must check if there is a DTT (double tax treaty) between the USA and your country for more details. i.e. : When you pay dividends to a foreign entity, there is a withholding tax on the dividends payment that you must remit to the IRS.

If there is no DTT between the USA and your country, you won't likely recevie a FTC (foreign tax credit) on the witholding tax you paid to the IRS.

Example : If your Nevada corp pays 100k in dividend to yourself in Canada; your Nevada corp will remitt 25k to the IRS. So you'll receive only 75k. The CCRA (Canada Custom Revenue Agency) will tax you at 45% on 100k (not 75k). So you'll have to remitt to the CCRA the amount of 45k.

You now only have 30k out of the 100k that your Nevada corp paid to you. But, because the Canada has a DTT with the USA, you can claim back the tax you paid to the IRS (it was witheld by the Nevada corp, but it is YOU who paid it).

So you can claim back 25k to the CCRA and expect TONS and TONS of questions and hassles.

**If your Country doens't have a DTT with your Country; you are fucked. You'll pay tax 2 times.

Good Luck!

quiet · 01-02-2003, 06:09 PM

Quote:

Originally posted by x582
1.3
If you have multiple offices - The office where your staff, your marketing activities, "the mind and management" of your operations are located, will determined your region.

hmm

m0rph3us · 01-02-2003, 06:11 PM

Quote:

Originally posted by x582
It says :

1.
You must do business with an IPSP in your region.

1.2
You region is defined by where is your PRINIPAL/MAIN office located.

1.3
If you have multiple offices - The office where your staff, your marketing activities, "the mind and management" of your operations are located, will determined your region.

2.
You have to pay income tax at the location you are conducting business.

(If you are a foreing webmasters and you have incorporated in the USA to comply with Visa new Regulations - you'll have to file annual tax return to the IRS. You will pay tax on your net income (revenue less deductible expenses). If you are paying dividensd to yourself in your home country, you must check if there is a DTT (double tax treaty) between the USA and your country for more details. i.e. : When you pay dividends to a foreign entity, there is a withholding tax on the dividends payment that you must remit to the IRS.

If there is no DTT between the USA and your country, you won't likely recevie a FTC (foreign tax credit) on the witholding tax you paid to the IRS.

Example : If your Nevada corp pays 100k in dividend to yourself in Canada; your Nevada corp will remitt 25k to the IRS. So you'll receive only 75k. The CCRA (Canada Custom Revenue Agency) will tax you at 45% on 100k (not 45k). So you'll have to remitt to the CCRA the amount of 45k.

You now only have 30k out of the 100k that your Nevada corp paid to you. But, because the Canada has a DTT with the USA, you can claim back the tax you paid to the IRS (it was witheld by the Nevada corp, but it is YOU who paid it).

So you can claim back 25k to the CCRA and expect TONS and TONS of questions and hassles.

**If your Country doens't have a DTT with your Country; you are fucked. You'll pay tax 2 times.

Good Luck!

yay!

Brad Mitchell · 01-02-2003, 06:21 PM

Quote:

Originally posted by quiet

hmm

Hey quiet, maybe your offices are where your servers are located in the US?

Brad

x582 · 01-02-2003, 06:28 PM

Quote:

Originally posted by SinEmpire

Hey quiet, maybe your offices are where your servers are located in the US?

Brad

Under the standard DTT by the OECD they defined a "Permanent Establisment" by; (Permanent Establisment are subject to income tax where they are based at);

Place of Management
a Branch
an Office
a Factory
a Workshop
Premises used as a sales outlet

And does NOT include;

the use of facilities solely for the purpose of storage, display or delivery of goods/services or merchandise belonging to the enterprise. (servers)

TheDoc · 01-02-2003, 06:34 PM

That would mean you are double taxed.

A Canadian would not have to pay the IRS and the Canadian GoV. He would have to file and pay in Canada and FILE in the United States. Seeming the taxes are higher in Canada he would not have to pay taxes in the States.

VISA is only trying to cover it's ass they can't make up tax 'rules' for you to follow only a guideline of what they expect.

x582 · 01-02-2003, 06:55 PM

Quote:

Originally posted by TheDoc
That would mean you are double taxed.

A Canadian would not have to pay the IRS and the Canadian GoV. He would have to file and pay in Canada and FILE in the United States. Seeming the taxes are higher in Canada he would not have to pay taxes in the States.

VISA is only trying to cover it's ass they can't make up tax 'rules' for you to follow only a guideline of what they expect.

Scenario :

Wild Sex Inc. (Canco) is a Canadian company incorporated in Canada. Canco owns 5 paysites which generate a total of $100,000 per month.

In order to continue to do business with Paycom, Canco has to incorporate in the USA to follow the new Visa guidelines. Canco creates Hot Chick Inc. (Usaco) in Nevada.

Because the sites has to be in the USA, Canco has to sell at FMV (Fair Market Value) the site to Usaco. The price of the sites are determined by FMV with complex calculations. Let's say for the purpose of this examples that the price is $500,000.

Usaco buys the sites and contract Paycom to process the credit cards of the 5 sites.

At the end of the fiscal year of Usaco, the EBIT (earning before income tax and interest) is $800,000. Then, Usaco has to pay income tax of about (let's say) 35%.

EBIT = $800,000
IRS Income Tax = $280,000

NET INCOME = $520,000

Canco would like to receive 25% of the net income.

So Usaco pays $130,000 in Dividends to Canco.

Because Usaco pays dividends to a foreing entity, Usaco has to pay a witholding (on the behalf of Canco) of %25 of the dividends paid.

So Usaco pays $32,500 to the IRS (Witholding Tax)

Canco has to pay income tax of about (let's say) %35 on $130,000 of dividends he received from Usaco.

So Canco pays $45,550 to the CCRA (Canada Custom Revenue Agency).

Because Canco paid a tax to the IRS on the dividends and there is a DTT (Double Tax Treaty) with the USA, Canco can claim back the $32,500 paid to the IRS..

TheDoc · 01-02-2003, 07:52 PM

Just open a US corp and have it fully owned by a Canadian company. Then nothing changes. You only have to report the money earned in the US but you do not have to pay taxes on it.

The Canadian company can invoice 100% of the US corp earnings.

You could keep the US corp and pay the employees/partners as a contract employee with a bonus instead of dividends.

Same thing but the Canadian company invoices 100% of the salleries including the dividend amoutn and then pay out from Canada on the normal tax system. The company in the US would then need to be owned 51% or more by an American so it's not Canadian controlled, then it doesnt have to pay corporate taxes other than the money it brings in for paying employees.

Their is about 50 different ways to get around the VISA rules when it comes to paying taxes or even reporting them.

Or do what most did... Set up a US corp and have Epoch send wires to the Canadian bank.. Problem solved.

x582 · 01-03-2003, 12:29 AM

I suggest that you guys go see a tax attorney or firm. Like we did with KPMG.

There is a lot of things you can do that are not legal or "okay" with the CCRA (for canadians). Study the Jusrisprudence of the CCRA cases and you'll see.

**
Invoicing 100% for the salaries is not legal. Everything that is not at Fair Market Value is contested by the CCRA.

retalie77 · 01-03-2003, 07:47 AM

to KK - wanna talk - please email

Mutt · 01-03-2003, 09:11 AM

what about the IPSP's? Are they subject to the same rules, can an American IPSP do what Globill did and somehow keep processing for people in different VISA geographic regions? That didn't sound right from the beginning. If they want merchants tied down to one region, it would seem to me that they'd demand IPSP's also comply to the same standard.

sounds like a major headache to me for Canucks, the only thing that isn't docile in Canada is the friggin tax department. I've seen them in action. Pitbulls.

directfiesta · 01-03-2003, 09:19 AM

Quote:

Originally posted by Mutt
the only thing that isn't docile in Canada is the friggin tax department. I've seen them in action. Pitbulls.

STARVED pitbulls

jimmyf · 01-03-2003, 10:44 AM

Quote:

Originally posted by TheDoc
That would mean you are double taxed.

A Canadian would not have to pay the IRS and the Canadian GoV. He would have to file and pay in Canada and FILE in the United States. Seeming the taxes are higher in Canada he would not have to pay taxes in the States.

VISA is only trying to cover it's ass they can't make up tax 'rules' for you to follow only a guideline of what they expect.

I would think you are correct. But in the US you are taxed more than any double. In California you are even taxed on use. Go buy a new desk, computer, chairs, etc. Open your new office and, yip the county comes around, looks, ask what did you pay for that...how about that thing over there...by the way what is that thing over there.. Then you get a USE tax bill from the county each and every year. Forget that you paid sales tax when you bought all the stuff's for your new office.

Webby · 01-03-2003, 10:59 AM

*?Ï The Merchant holds a valid business license for the Merchant Outlet.

?Ï The Merchant Outlet pays taxes related to the sales activity. *

Whoever dream't that load up obviously lives in a cocoon - we don't have "business licenses" nor not we pay any taxes - the list goes on.

I like the PO boxes are unacceptable - hell our "address" is 200 meters east of the old oak tree and 100 meters south" - if it were not for PO boxes there is little chance of gettin any mail!

And that's the way it's gonna stay!

VISA just don't rule here!

PS.. By the way.. the old oak tree fell down in 1954.. so hell knows how anyone would find us!

01-02-2003, 05:32 PM	#1
retalie77 Registered User Join Date: Jan 2003 Posts: 3	New Visa rules (begin) Electronic Commerce (i) Additions to Rules of determine Electronic Commerce Merchant Location (ii) Changes of Cross-Border Acquiring Rules In brief: Rules are announced that determine where a Transaction takes place in the virtual environment. With the proliferation of third-party entities helping online sellers accept payment cards on the Internet, Visa has adapted its rules, which will better reflect the new business models while reinforcing Member obligations and responsibilities. Cross-border acquiring restrictions are revisited in the light of these new requirements. The Member acknowledges that the information contained in this Letter is confidential to the intended recipient (the Member) only and the Member agrees that it will not use or disclose, or allow to be used or disclosed, any information supplied by Visa which the Member has received without the prior written consent of Visa. The Member agrees that it will use all its best endeavours to prevent the unauthorised use or disclosure of such information to any third parties. (i) Merchant Location BACKGROUND In the physical world, the location of a Merchant Outlet determines the country where the Merchant must deposit its Transactions, which Acquirers may contract with it, and which domestic, regional, or interregional rules apply to the Transactions it generates. Until now, a Merchant Outlet was defined as ¡§the physical premises of the Merchant at which a Transaction is completed.¡¨ Since this description does not address the online environment, Visa has developed a set of criteria to help Members and Merchants determine a remote Merchant Outlet¡¦s location. The new criteria expand the current rules for Mail/Phone Order (MO/TO) and Electronic Commerce Merchants, stipulating that a Transaction takes place at the Merchant Outlet, regardless of the Cardholder location at the time of the Transaction. Approved Operating Principles 1.0 Merchant Outlet The definition of Merchant Outlet has been expanded by adding the italicised text: Merchant Outlet: The physical premises of the Merchant at which a Transaction is completed. Effective 01 January 2003, an Electronic Commerce or Mail/Phone Order Merchant Outlet is located in the country where all of the following conditions occur: ?Ï There is a permanent establishment through which the economic activity (i.e., relevant Visa Transactions) is completed. ?Ï The Merchant has a local address for correspondence and judicial process. Note: A Post Office Box or mail forwarding service does not meet this requirement. ?Ï The Merchant holds a valid business license for the Merchant Outlet. ?Ï The Merchant Outlet pays taxes related to the sales activity. In case of dispute, Visa reserves the right to determine a Merchant Outlet¡¦s location based on an evaluation of the Merchant¡¦s business model and any other available information. Visa reserves the right to request from the Member necessary documents for determination a Merchant Outlet¡¦s location. Visa¡¦s decision is final. As in the physical world, a single Merchant can have multiple Merchant Outlets that may be located in multiple jurisdictions. 2.0 Website Requirement To minimise Cardholder confusion, the existing requirement that a Merchant declare its country of domicile on its Websites is revised effective 01 January 2003, to require that the country of domicile of the Merchant Outlet location be clearly disclosed to the Cardholder immediately prior to completion of payment instructions. MEMBER IMPACT Acquirers must incorporate these criteria into their procedures and policies for evaluating prospective Merchants. In addition, Acquirers must review existing Merchants to ensure compliance with these requirements. All Merchants are required to display the Merchant Outlet country of domicile to the Cardholder immediately prior to completing payment instructions. In accordance with current rules governing Merchant Agreement requirements, an Acquirer must include this provision in its Electronic Commerce Merchant Agreements. (ii) Changes of Cross-Border Acquiring Rules Effective 01 January 2003 the Principles governing Member jurisdiction are reviewed to assist Members in determining their jurisdictional rights to sign Electronic Commerce Merchants. The rules for signing a traditional ¡§brick-and-mortar¡¨ Merchant, as specified in the Visa International Operating Regulations, Volume 1 ¡V General Rules, Section 4.2.A.2 Cross-Boarder Merchant Contracting, also apply to Electronic Commerce Merchants, and reflect a fundamental principle of the worldwide system: Visa Program development within any country is best achieved through the participation of indigenous institutions within that country. Electronic Commerce Merchants may only be signed by a Member within the country jurisdiction to acquire E-commerce Transactions. Member should not sign with any Electronic Commerce Merchants outside a Member jurisdiction. Visa may impose a special schedule of fines for any willful violation of this requirement. Jurisdiction and Multiple Merchant Locations The Visa International By-Laws and Regional Boards Delegations specifies the jurisdiction of a Member. It states that ¡§the jurisdiction of a Member is limited to the country (including territories and possessions thereof) where it has its principal place of business¡K¡¨ For example, if a Member¡¦s principal place of business is in the United States, the Member may sign Merchant Outlets that are located in the United States and its territories, such as Guam, Puerto Rico, and the US Virgin Islands. However, a territory may be part of another Visa Region. Therefore, Members must be aware of, and comply with, any additional requirements, including the payment of any fees imposed by the applicable Regional Operating Regulations. Some Merchants, however, have locations in more than one country, and may only be signed by a Member with the jurisdictional right to acquire Transactions in that country. Merchant Qualification Standards Before signing any Merchant, an Acquirer or IPSP, as specified in the Visa International Member Letter IML # 13/02, acting in accordance with the new IPSP requirements must determine that a prospective Merchant is financially responsible and will abide by the Visa International and Regional Operating Regulations, as well as applicable local law. This includes ensuring that the Merchant is bona fide, legitimately doing business in the country it declares as its business location. An Acquirer or IPSP should exercise particular diligence when investigating a remote or electronic commerce entity to confirm the country location of an Electronic Commerce Merchant. Visa reserves the right to request from the Member necessary documents for additional investigation Electronic Commerce Merchant especially in the event that the Merchant has a significant volume transaction or a high level of chargeback. As described in part (i) of this letter, the following information must be associated with the same country: ?Ï Information available on the Merchant¡¦s Website (i.e., where does the Merchant claim it is located and where does the Merchant declare its choice of law?) ?Ï Information provided by the Merchant on its application forms as to its physical address (must be a physical address, not a P.O. Box or mail- forwarding service) ?Ï Physical premises (a ¡§permanent establishment¡¨) where staff that support sales activity for the goods or services being sold is located. ?Ï Business license (what governing authority issued the license for the Merchant to legally conduct business) ?Ï Where the taxes associated with the sale of goods and merchandise are paid. Additionally, Acquirers and IPSPs must ensure that the Merchant or Sponsored Merchant is financially sound, e.g., by reviewing credit reports, obtaining a detailed business description, etc. Such investigations could also be extended to the Merchant¡¦s agents, such as supplier and fulfillment partners. The majority of these factors apply to MO/TO Merchants. Examples Examples are provided in the Attachment, ¡§Determining Merchant Location for Remote Merchants.¡¨ As illustrated in the examples, the location of a Merchant's headquarters has no bearing on evaluating an Acquirer's right to acquire Transactions from a particular Merchant Outlet; Acquiring rights are related to the location of the individual Merchant Outlet. Note that, for Electronic Commerce Merchants, the country where the Website is registered is merely a possible indication of a Merchant Outlet's country. A Member must consider all relevant factors in determining the location of a particular Merchant Outlet. Non-Member Agents and IPSPs are bound by these jurisdictional requirements and may only solicit Merchant Outlets within the jurisdiction of their acquiring Members.

01-02-2003, 05:33 PM	#3
Candyman69 Confirmed User Join Date: Jul 2002 Location: Florida Posts: 764	someone sum this shizzo up =) __________________ domain buyer

01-02-2003, 05:35 PM	#4
WiredGuy Pounding Googlebot Industry Role: Join Date: Aug 2002 Location: Canada Posts: 34,486	Someone want to summarize that to clarify what are the new rules for the taxation rule. I've been going by physical address but I'm too lazy to read all that. WG __________________ I play with Google.

01-02-2003, 06:05 PM	#8
Chris Mallick Confirmed User Join Date: Jan 2002 Location: Marina del Rey, CA, USA Posts: 679	These are the rules that went into effect November 15th for Visa USA. All other Visa Regions seem to be required to follow these rules effective yesterday. This is not new news nor are these new rules. Chris CEO EPOCH __________________ Chris Mallick [email protected]

01-02-2003, 06:07 PM	#9
x582 Confirmed User Join Date: Mar 2002 Location: heh? Posts: 609	It says : 1. You must do business with an IPSP in your region. 1.2 You region is defined by where is your PRINIPAL/MAIN office located. 1.3 If you have multiple offices - The office where your staff, your marketing activities, "the mind and management" of your operations are located, will determined your region. 2. You have to pay income tax at the location you are conducting business. (If you are a foreing webmasters and you have incorporated in the USA to comply with Visa new Regulations - you'll have to file annual tax return to the IRS. You will pay tax on your net income (revenue less deductible expenses). If you are paying dividensd to yourself in your home country, you must check if there is a DTT (double tax treaty) between the USA and your country for more details. i.e. : When you pay dividends to a foreign entity, there is a withholding tax on the dividends payment that you must remit to the IRS. If there is no DTT between the USA and your country, you won't likely recevie a FTC (foreign tax credit) on the witholding tax you paid to the IRS. Example : If your Nevada corp pays 100k in dividend to yourself in Canada; your Nevada corp will remitt 25k to the IRS. So you'll receive only 75k. The CCRA (Canada Custom Revenue Agency) will tax you at 45% on 100k (not 75k). So you'll have to remitt to the CCRA the amount of 45k. You now only have 30k out of the 100k that your Nevada corp paid to you. But, because the Canada has a DTT with the USA, you can claim back the tax you paid to the IRS (it was witheld by the Nevada corp, but it is YOU who paid it). So you can claim back 25k to the CCRA and expect TONS and TONS of questions and hassles. *If your Country doens't have a DTT with your Country; you are fucked. You'll pay tax 2 times. Good Luck! Last edited by x582; 01-02-2003 at 06:12 PM..*

01-02-2003, 05:37 PM	#5
Theo HAL 9000 Industry Role: Join Date: May 2001 Posts: 34,515	who are you retalie77? I assume this is not just an informative post and something else will follow (or was supposed to follow).

01-02-2003, 05:52 PM	#6
Kimmykim bitchslapping zebras!!!!! Industry Role: Join Date: Jun 2001 Location: In a shack by the beach Posts: 16,015	Like a request to the board admins for the users ip and other login info? If you're going to post something you shouldn't, at least cut off the part that says you shouldn't... "The Member acknowledges that the information contained in this Letter is confidential to the intended recipient (the Member) only and the Member agrees that it will not use or disclose, or allow to be used or disclosed, any information supplied by Visa which the Member has received without the prior written consent of Visa. The Member agrees that it will use all its best endeavours to prevent the unauthorised use or disclosure of such information to any third parties."

01-02-2003, 06:34 PM	#14
TheDoc Too lazy to set a custom title Industry Role: Join Date: Jul 2001 Location: Currently Incognito Posts: 13,827	That would mean you are double taxed. A Canadian would not have to pay the IRS and the Canadian GoV. He would have to file and pay in Canada and FILE in the United States. Seeming the taxes are higher in Canada he would not have to pay taxes in the States. VISA is only trying to cover it's ass they can't make up tax 'rules' for you to follow only a guideline of what they expect. __________________ ~TheDoc - ICQ7765825 It's all disambiguation

01-02-2003, 07:52 PM	#16
TheDoc Too lazy to set a custom title Industry Role: Join Date: Jul 2001 Location: Currently Incognito Posts: 13,827	Just open a US corp and have it fully owned by a Canadian company. Then nothing changes. You only have to report the money earned in the US but you do not have to pay taxes on it. The Canadian company can invoice 100% of the US corp earnings. You could keep the US corp and pay the employees/partners as a contract employee with a bonus instead of dividends. Same thing but the Canadian company invoices 100% of the salleries including the dividend amoutn and then pay out from Canada on the normal tax system. The company in the US would then need to be owned 51% or more by an American so it's not Canadian controlled, then it doesnt have to pay corporate taxes other than the money it brings in for paying employees. Their is about 50 different ways to get around the VISA rules when it comes to paying taxes or even reporting them. Or do what most did... Set up a US corp and have Epoch send wires to the Canadian bank.. Problem solved. __________________ ~TheDoc - ICQ7765825 It's all disambiguation Last edited by TheDoc; 01-02-2003 at 07:57 PM..

01-03-2003, 12:29 AM	#17
x582 Confirmed User Join Date: Mar 2002 Location: heh? Posts: 609	I suggest that you guys go see a tax attorney or firm. Like we did with KPMG. There is a lot of things you can do that are not legal or "okay" with the CCRA (for canadians). Study the Jusrisprudence of the CCRA cases and you'll see. ** Invoicing 100% for the salaries is not legal. Everything that is not at Fair Market Value is contested by the CCRA.

01-03-2003, 07:47 AM	#18
retalie77 Registered User Join Date: Jan 2003 Posts: 3	to KK - wanna talk - please email

01-03-2003, 09:11 AM	#19
Mutt Too lazy to set a custom title Industry Role: Join Date: Sep 2002 Posts: 34,431	what about the IPSP's? Are they subject to the same rules, can an American IPSP do what Globill did and somehow keep processing for people in different VISA geographic regions? That didn't sound right from the beginning. If they want merchants tied down to one region, it would seem to me that they'd demand IPSP's also comply to the same standard. sounds like a major headache to me for Canucks, the only thing that isn't docile in Canada is the friggin tax department. I've seen them in action. Pitbulls. __________________ I moved my sites to Vacares Hosting. I've saved money, my hair is thicker, lost some weight too! Thanks Sly!

01-03-2003, 10:59 AM	#22
Webby Too lazy to set a custom title Join Date: Oct 2002 Location: Far far away - as possible Posts: 14,956	?Ï The Merchant holds a valid business license for the Merchant Outlet. ?Ï The Merchant Outlet pays taxes related to the sales activity. Whoever dream't that load up obviously lives in a cocoon - we don't have "business licenses" nor not we pay any taxes - the list goes on. I like the PO boxes are unacceptable - hell our "address" is 200 meters east of the old oak tree and 100 meters south" - if it were not for PO boxes there is little chance of gettin any mail! And that's the way it's gonna stay! VISA just don't rule here! PS.. By the way.. the old oak tree fell down in 1954.. so hell knows how anyone would find us!