Provider already paid taxes for an unpaid invoice?

[diatessaron]

Hei there good people, I'm in a bit of a situation here so I need advice.

I used to have an employee who worked for one of my companies and during his time with us, since he was in charge of the whole thing, he signed an agreement with a 3rd party for their services, a bad decision. It's a non legal binding agreement but yesterday evening I got an email from one of their representatives (3rd party company) asking me to pay an invoice, telling me that they have already paid taxes on it and that I should cover the bill so they don't have to break the agreement with us because of this fruitful partnership bla bla bla.

Now, I'm not an expert when it comes to taxes, but this smells weird. I've never heard of someone paying taxes on money they still haven't made. Only thing I've ever heard of is world governments trying to tax unrealised gains on crypto and stocks but not on services, and it's all been mouth running only.

I'd appreciate a reply, what is this? Is this even possible?

Thank you.

 

[jafo]

I would start by, NICELY & non-aggressively, asking for (IRREFUTABLE) proof (i.e. official documentation) so you can forward them on to your records/accountants/lawyers/bankers/compliance officers at banks/regulators.

 

[Onassis]

Now, I'm not an expert when it comes to taxes, but this smells weird. I've never heard of someone paying taxes on money they still haven't made.

It's possible if it's VAT

 

[xnpu]

If you have no intention of paying they can issue a credit invoice and have the VAT returned.

Imho they should avoid this issue by sending pro forma invoices prior to payment, final ones after.

 

[rrios50170]

You can participate in tax exemption policies