VAT in UK

By Vikas Marwaha Manoj Singh

1

Types of Taxes
VAT

Indirect tax

Excise Others like Customs, Service tax Income/Corporate tax

Taxes

Direct tax Others like Capital gain tax, Property, Entitlement

2

Indirect taxes in supply chain

What is VAT?
Collected on business transactions,
imports and acquisitions that VAT registered businesses provide in UK.

VAT is charged when a VAT-registered

business sells to either another business or to a non-business customer.

Businesses add VAT to the price they

charge when they provide goods and services.

Tax on the value added at each stage.

4

Tax Credit Method

Input Tax-When a company buys goods or services from
another supplier, VAT is charged on the purchase cost. This is known as input tax. Output Tax-The amount of value added tax a company adds to the price of its product or service. Works on Tax Credit Method: Tax at sales, credit at purchase

As per this principle, Input VAT = 3000*(12.5/100) = 375 Output VAT = 4000*(12.5/100) = 500 VAT credit to manufacturer = Input VAT paid Net VAT to government by manufacturer = 500-375 = 125

VAT Calculation Methods

VAT Calculation Methods
Invoice-based credit method (Indirect) Compute the tax to be imposed at each stage of sales on the entire sale value Set-off the tax paid at the earlier stage. (i.e., at the stage of purchases in set-off) The differential amount (i.e. Step 2 Step1) is required to be paid Subtraction method (Direct) Determine Value addition as: Total value of sales Less: Total value of purchases (both exclusive of tax)

VAT Calculation Formulae

Calculations changes with the type of
calculation methodology and /exempt /zero rates condition.
Cases Substraction Method

standard

Credit invoice method

t1*P1+t2*(P2-P1) +t3*(P3- t1*P1+[t2*P2-t1*P1]+[t3 *P3No exemption, no zero rating P2) t2*P2] = t3*P3 Exemption of the first stage Exemption of the second (middle) stage Exemption of the third (last) stage Zero rating of the first stage Zero rating of the second (middle) stage Zero rating of the third (last) stage t2 *P2+t3*(P3-P2) t1 *P1+t3*(P3-P2) t1 *P1+t2*(P2-P1) t2 *P2+t3*(P3-P2) t2*P2+[t3*P3-t2*P2] = t3*P3 t1*P1+t3*P3 t1*P1+[t2*P2-t1*P1] = t2*P2 t2*P2+[t3*P3-t2*P2] = t3*P3 t1*P1+[0*P2-t1*P1]+[t3*P3t1 *P1+0*(P2-P1)+t3*(P3-P2) 0*P2]=t3*P3 t1*P1+[t2*P2-t1*P1]+[0*P3t1 *P1+t2*(P2-P1)+0*(P3-P2) t2*P2]=0

VAT Calculations-Direct Method

Details Purchase Value Added Sub-total Add Tax 10% Total A --100 100 10 110 B 100 40 140 14 154

B purchases goods from A @

Rs. 110, which is inclusive of duty of Rs. 10.

B charges conversion cost (value

added) of Rs. 40 and sell his goods at Rs. 140 without considering duty of Rs 10.

He charges 10% tax and raise

invoice of Rs. 154 to C. B will pay only Rs 4 to the Govt. since he is having credit of Rs. 10.Thus, in effect, B has to pay duty only on value added by him.
8

Assume A is supplier & B is manufacturer. Tax revenue with VAT = Rs.14.

VAT Calculations-Indirect Method

Indirect method is self enforcing

The consumer pays 605 out of which 105 is tax

Distance sales
Distance sales-Refers to goods which are:
Either transported or dispatched to unregistered persons in the State from another EU Member State or from outside the EU through another EU Member State. Transported or dispatched to unregistered persons in another EU Member State from UK. IF distance sales threshold limit exceeds the place the POS is where transport ends.

10

Who are required to pay VAT?

Person who makes taxable supplies above certain value limits (currently 77,000) Reverse-charge services received by a taxable person Importation of goods from outside the EU Unregistered person acquiring goods from another EC member state Person making distance sales above the limit of 70,000 Voluntary registration is allowed

For VAT purposes, the United Kingdom consists of Great

Britain, the Isle of Man and Northern Ireland. It does not include the Channel Islands or Gibraltar.
11

When VAT registration?

A firm has to register for VAT if either:
Sales of non-exempt goods and services for the previous 12 months exceed the VAT registration threshold currently 77,000) Voluntary registration for the businesses with sales below 77,000 However for Intra-Community acquisitions limit is: 70,000 For Distance Sales: 70,000

Companies registered under VAT have to submit their VAT

returns to HMRC:
As a General rule: Quarterly Monthly If requested by a business that receives regular repayments

12

Why VAT registration?

For VAT-registered business:
Charge VAT on the goods and services provided Reclaim the VAT you paid on goods and services (raw
materials) for your business

If you are not VAT-registered then you cannot reclaim the VAT
you pay when you purchase goods and services.

If you purchase services or goods before you register for VAT,

you may be able to get a VAT credit for them.

The credit generally applies for services and goods purchased

up to four years prior to VAT registration.
13

Group registration
Corporate bodies that are under common control and are
established or have a fixed establishment in the United Kingdom may apply to register as a VAT group.

A VAT group is treated as a single taxable person. The group

members share a single VAT number and submit a single VAT return.

No VAT is charged on supplies made between group members.

Group members are jointly and severally liable for all VAT liabilities.

14

Criteria for Group Registration

General Criteria:
Each body has its principal or registered office in the UK They are under common control

Special Criteria: If the turnover of the VAT group is over 10

million per year and the group is partly owned or managed by a third party:

No more than 50 per cent of benefits generated by the business

go to third parties Group uses consolidated accounting No third party consolidates the group into its accounts

The registration is made in the name of the 'representative

member
15

Non established businesses

A non established business is a business that does not have a
fixed establishment in the United Kingdom

Must register for VAT if:

Goods located in the United Kingdom at the time of supply Intra-Community acquisitions of goods Distance sales of goods to U.K. residents who are not taxable
persons Services to which the reverse charge does not apply

16

Destination principle

VAT is charged based on the place where they are consumed. It implies that whether the Mr. X purchases raw material locally
or imports it, he has to pay VAT at French rate only. However, it requires the monitoring of cross-border trade flows and administrative co-operation. For trade of goods between two VAT registered businesses in different EU countries Destination principle
17

Origin principle

where produced, regardless of where they are consumed. However, the origin principle introduces the possibility for the tax system to discriminate between domestically produced goods and imports. For the dispatch of goods/services to a non registered business or customer in another EU country Origin principle

The origin principle implies the taxation of goods and services

18

MTIC Fraud in VAT

MTIC fraud arises
when a business makes an intraCommunity purchase without paying VAT, collects VAT on an onward sale, and then disappears without remitting the tax.

19

Reverse Charge Principle

Normal Transactions: Seller is
responsible for VAT collection and filing. Reverse-charge transactions: Buyer is responsible for paying the VAT and turning over the receipts. However the buyer can reduce the amount that must be turned over to the government to the extent that he passes the VAT obligation to his customers with a reverse-charge. VAT obligation gets pushed all the way down the value-added chain.
20

Place of supply
Determine
whether a supply is subject to VAT in that State. Basic rule: supplies of goods in the State are subject to VAT in the State. transactions Movement of goods across frontiers involving goods, P.O.S is made where the customer belongs.
Transaction type
Goods are not dispatched or transported

POS

where the goods are at the time of supply

Goods are installed or assembled

where the goods are installed or assembled

In general, for B2B

Goods transported by vessels, aircraft & trains

where the transport begins

Electricity and gas

where electricity and gas is consumed

Advertising goods, Replacement goods and free samples

Free from VAT

For B2C transactions involving

services, P.O.S. is made where the supplier belongs.
Advanced payment Deemed Supply

21

Different VAT rates in UK Items in Different VAT rate regime

Standard rate :20% Reduced rate :5% Zero rate :0% VAT exempt goods Outside Scope of VAT

VAT rate of 20 % is applied on the final product Firms can reclaim the VAT paid on inputs.

VAT rate of 5 % is levied on final product Firms can reclaim the input VAT

No VAT levied upon the final good. Firms can reclaim any VAT paid on inputs as usual.

No VAT levied on final product. But firms cannot reclaim any input VAT paid on purchases

They are not taxable supplies and no VAT is charged on them

Luxury items and items excluding other categories

Domestic fuel or power Hygiene and Child care products Energy Saving Material

Food &Pharma products Necessary services like passenger transport Stationery

Finance and insurance Postal and health services Betting, Gaming and lottery

Donations to charity Tolls Welfare Services Hobby

22

Exempt with credit

Exempt with credit supplies are effectively treated as if they
were zero-rated, even though they are not within the scope of VAT.

No VAT is chargeable, but the supplier may recover related

input tax.

Exempt with credit supplies include services supplied to taxable

persons in the EU and to customers outside the EU.

23

Concept of Partial exemption

If a taxable person makes both exempt and taxable supplies, it
may not recover its input tax in full. This situation is referred to as partial exemption.
Standard partial exemption calculation method First stage Second stage Identifying the input tax that may be Identifying the directly allocated to overheads and taxable and to allocate it based on exempt supplies. the respective values of taxable and exempt supplies made.

24

Eligibility of refund (E.U. businesses)

Conditions of Refund:
The business is not registered or liable to be registered for VAT in the UK The business has no residence, seat or permanent establishment in the UK Businesses don't make any supplies within UK Carrying out transport services related to the international carriage of goods Services where the VAT on the supply is payable solely by the person whom they are supplied.

Minimum claim amount should be at least 35. Time limits: The application is to be submitted before 30th
September of a calendar year.
25

VAT recovery on Capital goods

Input tax is deducted in the VAT year in which the goods are
acquired. However, the amount of input tax recovered for capital goods must then be adjusted over time.

Land and buildings and related property expenditure valued at 250,000 or more: adjusted over a period of 10 years

Computer hardware valued at 50,000 or more: adjusted over a period of five years

Ships and aircraft valued at 50,000 or more: adjusted over a period of five years

VAT Recovery on Capital Goods 26

Non refundable VAT

Non-business supplies Passenger motor vehicles, unless used wholly for business purposes Business entertainment and hospitality

Non Recoverable VAT

Second hand goods for which no vat invoice is issued

Amounts of vat which have been incorrectly invoiced

Goods and services you have bought for resale or direct export

27

Eligibility of refund (Non E.U. businesses)

Conditions for refund:
The business is not registered or liable to be registered for VAT in the UK The business has no residence, seat or permanent establishment in the UK Businesses don't make any supplies within UK Carrying out transport services related to the international carriage of goods Services where the VAT on the supply is payable solely by the person whom they are supplied. Claimants own country allows similar concessions to UK traders in respect of its own turnover taxes

Minimum claim to be made is 16

28

VAT flat rate scheme

Eligibility Total sales of no more than 230,000, including VAT And non-exempt sales of no more than 150,000, excluding VAT Flat Rate Scheme Applicant charges VAT from customers as normal but pays to HMRC at a fixed % (typically 14.5 %) of total sales. Cant claim back any of the VAT paid on purchases, though, apart from if purchase is a capital asset that cost 2,000 or more including VAT, and on the stock and assets you held when you registered for VAT.

29

Example of benefits from Flat rate scheme

Mr. X is a consulting engineer earns a total sales of 100000
pounds from the client He make small purchases of 10000 pounds

Standard VAT a/c:

Input VAT = 2000 Output VAT = 20000 VAT paid by Mr. X = 18000

Flat rate scheme

Flat rate = 14.5 % Total Sales including VAT = 120000 (This is because you charges client in normal way) VAT paid by Mr. X = 120000*14.5/100 = 17400

Mr. X saves 600 by this scheme Additionally one can get a 1 % deduction in the first year

30

Cash Accounting Scheme for VAT

Eligibility
Estimated VAT taxable turnover during the next tax year is not more than 1.35 million

Cash Accounting Scheme

Pay VAT on your sales after customers has paid Reclaim VAT on your purchases when you have paid Hence cash accounting helps when sales exceeds purchases It helps in managing the cash flows

31

VAT Annual Accounting Scheme

Eligibility
Estimated VAT taxable turnover during the next tax year is not more than 1.35 million

Annual Accounting Scheme

Helps small businesses by allowing them to submit only one VAT return annually rather than the normal four Businesses pay their VAT in nine monthly installments of 10% of the previous years liability. The installments are payable at the end of months 4-12 of the current annual accounting period. Alternatively such businesses may choose to pay their VAT in three quarterly installments of 25% of the previous years liability falling due at the end of months 4, 7 and 10. The balance of VAT for the year is then due together with the VAT return two months after the end of the annual accounting period.
32

Standard Accounting versus Annual Accounting

Standard accounting Annual accounting

Liability to be
paid each month is known and certain, cash flow can be managed more easily Simplifies calculations Interim payments may be higher than needed
33

Payments on account
Taxable persons whose annual VAT liability is greater than 2.3
million must make payments on account, which are interim payments made at the end of the second and third months of each VAT quarter. The VAT return is due at the normal time together with a balancing payment for the period. The level of the payments on account is generally calculated as 1/24 of the taxable persons VAT liability for the preceding 12 months. Electronic transfers must be used for all payments on account.

34

Triangular Transaction

Simplification measure
The zero-rated intra-Community supply from company A to
company B, The supply is listed by company A to company B, As company B has quoted its VAT number, it has made an intraCommunity acquisition and accounts for this in its VAT return, Company B makes a VAT-free supply to company C who accounts it in its VAT return as a received supply.
35

Penalties for late payment of VAT

If a VAT return or
payment is late, the taxable person is issued a Surcharge Liability Notice. Surcharge period: A period of 12 months from the last day of the VAT period under default
First default in the surcharge period: penalty of 2% of the outstanding VAT Second default in the surcharge period: a penalty of 5% of the outstanding VAT Third default in the surcharge period: a penalty of 10% of the outstanding VAT

Fourth and any subsequent defaults in the surcharge period: a penalty of 15% of the outstanding VAT 36

Flow Chart to determine applicable VAT rate

37

VAT impact on Supply Chain

38

Thank you

I. Online VAT Return in UK. II. Reporting requirements and procedures.

Vikas Marwaha Manoj Singh

1

Online Return Process

Register and enroll at HMRCs website Login Go to option Submit a return Put Security options (forgot password check options) Fill 1 to 9 (Do not fill 3 and 5) Submit User receives instant return copy receipt no. Remember if u do this u will have to fill pay/receive online

Vat return form, manual filling

Vat online return form

Oracle people soft return

Box 1: VAT due on sales and other outputs

This is the total amount of VAT you charged on sales to customers. User must also include the VAT you need to pay to HMRC for certain Income other supplies that you've made, such as: received
Facilities you provide to your employees

from non Sales to staff. business activities Sales of business assets. ex commercial vehicle machinery Hiring or loaning of goods. Commission received from selling on behalf of someone else. Anything you bartered, exchanged or part-exchanged. Goods or services, such as products or computer software, that you or your staff take out of the business for personal use. Any Gifts or samples you gave to someone that cost you more than 50. Any goods you bought that the reverse charge procedure applies to Any Fuel scale charges.

Subtract from this total any credit notes you've issued or debit notes you've received and enter the result in box 1.
6

Box 2: VAT due from you (but not paid) on acquisitions from other EU countries
You need to work out the VAT due - but not yet paid by you - on goods that you buy from other EU countries, and any services directly related to those goods (such as delivery charges). Put the figure in box 2.

You may be able to reclaim this amount, and if so remember to include this figure in your total in box 4.

Box 3: Total VAT due

This is the total of box 1 and box 2 added together. It is the amount of VAT that is due to HMRC.

When you complete your return online, this figure is worked out automatically for you, based on the information you put in boxes 1 and 2. You must not enter the total VAT due figure into box 3 or any other box on your online return.

Box 4: VAT reclaimable on your purchases

This is the VAT you have been charged on your purchases for use in your business. You should also include:
VAT you paid on imports from countries outside the EU. VAT you paid on goods you removed from a bonded warehouse or free zone. VAT due (but not paid) on goods from other EU countries and services directly related to those goods (such as delivery charges) - this is the figure you put in box 2.

Deduct from this total:

The Vat On Any Credit Notes You've Received. The Vat On Any Supplier Invoices Over Six Months Old That You Haven't Paid And That You Are Obliged To Account For As A 'Bad Debt.

The Result Is The total VAT you can claim back from HMRC.
9

Box 5: VAT payable or reclaimable

When you complete your return online, the figure for this box is worked out automatically for you based on the information in boxes 3 and 4.

If the amount in box 3 is more than the figure in box 4, you pay the amount in box 5 to HMRC.

If the amount in box 3 is less than the figure in box 4, you reclaim the amount in box 5 from HMRC.

If the amount in box 5 is zero, you have no VAT to pay or reclaim, but you must still submit your return.

10

Box 6: Your total sales excluding VAT

Enter the total figure for your sales (excluding VAT) for the

period, that is, the sales on which you charged the VAT you put in box 1. Additionally, you should also include:
Any zero-rated and exempt sales or other supplies you made. Any amount you put in Box 8. Goods or services you have supplied that are subject to the reverse charge. Goods or services that you have purchased that are subject to the reverse charge. Exports outside the EU.

notes you received. Don't include:

Take off the net amount of any credit notes you issued or debit
Loans, dividends and gifts of money. Insurance claims.

Reverse Charge Sales List

If you make reverse charge sales - sales to which a reverse charge is applied - you must notify HMRC and send in regular Reverse Charge 11 Sales Lists.

Box 7: Your total purchases excluding VAT

Enter the total figure for your purchases (excluding VAT) for the period, including:
The purchases on which you paid the VAT you put in Box 4. Anything you bought that the reverse charge procedure applies to. Any amount you put in Box 9.

Don't include:
Expenses like salaries and taxes. Anything outside the scope of VAT like vehicle license's, MOT certificates and local authority rates
12

Box 8: The total value of goods you supplied to other EU countries

Put in the total value of goods you supplied to another EU country and services related to those goods (such as delivery charges). You may also have to complete an EC Sales List (ESL) for supplies to VAT-registered customers in other EU countries. Remember to also include this amount in your Box 6 total. You should not include in box 8 the value of goods supplied to customers (including private individuals) who are not registered for VAT where you have not exceeded the 'distance selling' threshold. Each EU country can set its own distance selling threshold which at present 70,000

13

Box 9: The total value of goods you acquired from other EU countries
Enter the total value of goods you received from VAT registered suppliers in another EU country and services related to those goods (such as delivery charges).

Remember to also include this amount in your Box 7 total.

14

VAT Rules-Traders record requirements

15

Records Required
Following documents are to be maintained and updated on a continuous basis: Business records (bank statements and paying-in slips, accounts books, purchases and sales information) Accounting records(including details of assets, liabilities, income & expenditure). VAT account Copies of all VAT invoices issued and All invoices Received Documentation received relating to acquisitions of any goods from other member States Copy of documentation issued relating to the transfer, dispatch or transportation of goods to other member States, Documentation received relating to the transfer, dispatch or transportation of goods to other member States, Documentation relating to importations and exportations All credit notes, debit notes, or other documents which evidence an increase or decrease in consideration that are received, and copies of all such documents that are issued. A copy of any self-billing agreement where he is a customer, party to a selfbilling agreement-the name, address and VAT registration number of each supplier with whom he has entered into a self-billing agreement. 16

Minimum retention periods

Generally all business records that are relevant for VAT must be kept for at least six years. How ever, HMRC may allow to keep some records for a shorter period but not less than:
S.No. Minimum retention periods for certain types of record Type of record Minimum period of preservation Sales or service dockets (mainly used by large organisations especially those involved mainly in retail trading e.g. mail order houses). No restriction Copies of orders, delivery notes, dispatch notes, goods returned notes, invoices for expenses incurred by employees. 1 Year Production records, stock records (except those for second hand schemes), job cards, appointment books, diaries, business letters. 1 Year Import, export and delivery from warehouse documents. 3 Year Daybooks, ledgers, cashbooks, second hand scheme stock books. 3 Year Purchase invoices, copy sales invoices, credit notes, debit notes, authenticated receipts. 4 Year Daily gross takings records, records related to retail scheme calculations, catering estimates. 4 Year Bank statements and paying in books, management accounts, annual accounts. 5 Year Electronic Cash Registers (ECR) and Electronic Point of 17 Sale (EPOS) equipment 4 Year Any record containing the VAT account No concession

3 4 5 6 7 8 9 10

Business and accounting records

Order and Delivery notes Relevant business correspondence Purchase invoice from suppliers Credit notes Cash records and till roles Bank Statements and Pay in slips Annual accounts/general ledger Other account books

18

VAT account
Provides the link between business records and VAT Return. Account shows the cumulative VAT in your sales and purchases records which are then recorded in VAT account using separate headings for VAT payable and VAT reclaimable/deductible. Records under the heading of output tax:
The output tax owe on sales. The output tax owe on acquisitions from other EU member states. The tax that is required to be paid on behalf of your supplier under a reverse charge procedure. Tax that needs to be paid following a correction or error adjustment. Any other adjustment required by VAT rules.

Records under the heading of input tax:

The input tax you are entitled to claim from business purchases. The input tax allowable on acquisitions from other EU member states. Tax that you are entitled to following a correction or error adjustment.

Any other necessary adjustment.

19

Adjusting the VAT account

Different adjustment to VAT account:
Allow or receive a credit which includes VAT. Retail scheme annual adjustment. Are using an approved estimation procedure like in annual accounting scheme. Partial exemption or capital goods scheme adjustment . Claim for bad debt relief, or Correct a net error of 2,000 or less made on previous returns.

20

Typical VAT account

Input tax VAT you have been charged on your purchases January February March Sub-total Other adjustments (specify) Total tax deductible

Output tax VAT you have been charged on your sales 2215.23 January 1626.47 February 2792.01 March 6633.71 Sub-total Other adjustments (specify) 6633.71 Total tax payable Payable to HM Revenue and Customs

2 2780.23 2305.81 3302.45 8388.49 8388.49 1754.78

21

VAT invoices
Only VAT registered businesses can/must issue a VAT invoice whenever you supply standard-rate or reduced rate goods or services to another VAT registered person. Normally you must issue a VAT invoice within 30 days of the date you make the supply. There is no requirement to issue a VAT invoice for retail supplies of less than 250 to unregistered businesses unless the customer asks for one.

22

For transaction between one registered person to another registered person: A sequential number based on one or more series which uniquely identifies the document. The time of the supply . The date of issue of the document (where different to the time of supply) . The name, address and VAT registration number of the supplier . The name and address of the person to whom the goods or services are supplied . A description sufficient to identify the goods or services supplied . For each description, the quantity of the goods or the extent of the services, and The rate of VAT and the amount payable, excluding VAT, expressed in any currency . The gross total amount payable, excluding VAT, expressed in any currency . The rate of any cash discount offered . The total amount of VAT chargeable, expressed in sterling . The unit price . The reason for any zero rate of exemption. In addition, for Invoices to other EU Member States The letters GB in front of your registration number for cross border supplies . The registration number of the recipient of the supply preceded by the alphabetical code of the relevant EU Member State. 23

VAT invoices: what they must show

24

Concept of time of supply

The tax point, or time of supply, is the date when a sale is considered to take place for VAT purposes. Time of supply for transactions when no VAT invoice is issued
Date full payment received Before the date the supply takes place On the day when the supply takes place After the date when the supply takes place
Date invoice is issued Before, On or Between 1 and 14 days after the date the supply takes place

Time of supply The date the payment is received The date the supply takes place The date the supply takes place

Time of supply for transactions when VAT invoice is issued

Time of supply (tax point)

The date the invoice is issued The date the supply takes place (unless the supplier has permission from HMRC to move the time of supply to more than 14 days afterwards in which case it will be the date of the invoice)

15 or more days after the date the supply takes place

25

Time of Supply Rules- Special Cases

Returnable deposits Don't account for VAT - if the deposit is either: Refunded in full to the customer when they return the goods safely Kept by you to compensate you for loss or damage Advance Payment The tax point is whichever of the following happen first: The date you issue a VAT invoice for the advance payment The date you receive the advance payment Installments/Conditional Sale: A basic tax point for a conditional sale is created at the time of supply of the goods to the customer, at which VAT is accounted on the full value of the goods.

26

Register of temporary movement of goods to and from other member States.

For the temporary movements of goods between member states, following records have to be maintained:
The date of removal of goods to another member State, The date of receipt of the goods mentioned when they are returned from the member State. The date of receipt of goods from another member State, The date of removal of the goods when they are returned to the member State A description of the goods sufficient to identify them. A description of any process, work or other operation carried out on the goods either in the United Kingdom or in another member State, The consideration for the supply of the goods, and The consideration for the supply of any processing, work or other operation carried out on the goods either in the United Kingdom or another member State.
27

Concept of self-billing
A self-billing arrangement is where a customer prepares VAT invoices on behalf of their VAT-registered supplier. Conditions for self billing:
Enter into an agreement with each supplier. Review agreements with suppliers at regular intervals. Keep records of each of the suppliers who let you self-bill them. Make sure invoices contain the right information and are correctly issued.

28

Thank You

29

VAT in Netherlands

By Vikas Marwaha Manoj Singh

1

VAT Rates

Rates Standard-19% Reduced-6%

Example Most goods and services. Food and beverage not alcohol, Water, Pharmaceutical Products, Books, passenger transport, Entertainment. Export and intra community EU supplies. Banking/Insurances, property sector , medical services, Certain Education.

Zero Rated-0% Exempt

Thresholds
Thresholds Registration Distance Selling Intra state acquisitions None 100,000 100,000 Limit

No VAT registration threshold applies in the Netherlands. A taxable person . that begins activity must notify the VAT authorities of its liability to register
3

Scope of Tax
VAT applies to the following transactions:
The supply of goods or services made in the Netherlands by a taxable person. The intra-Community acquisition of goods from another EU member state by a taxable person. The intra-Community acquisition of goods from another EU member state by a nontaxable legal person in excess of the annual threshold. Reverse-charge services received by a taxable person and nontaxable legal entities in the Netherlands. The importation of goods from outside the EU, regardless of the status of the importer.

VAT return periods

Monthly: If the amount of VAT payable exceeds 15,000 per quarter

Quarterly: If the amount of VAT payable does not exceed 15,000 per quarter

Annually: If the amount of VAT payable does not exceed 1,883 per year

Who are liable

A taxable person is any business entity or individual that makes taxable supplies of goods or services, or intraCommunity acquisitions or distance sales, in the course of a business, in the Netherlands Taxable activities also include carrying on a profession or the exploitation of tangible or intangible property in order to obtain income on a continuing basis. Special rules apply to foreign or non established businesses.

Group Registration
Taxable persons established in the Netherlands may form a VAT group if the members are closely bound by financial, economic and organizational links. For legal certainty, it is recommended that persons meeting the conditions for group registration inform the Tax Office. The effect of VAT grouping is to treat the members as a single taxable person. As a result, transactions between members of the VAT group are disregarded for VAT purposes. Members of a Dutch VAT group may file a single VAT return, or members may elect to file individually. Each member of a VAT group is jointly and severally liable for all VAT due.

Non-established businesses
Is a business that has no fixed establishment in the Netherlands.

Netherland

Non Established Business supply of goods and services

Reverse charges do not apply

Reverse charges applies

Other E.U.

Taxable person

Private person

Non established businesses

A non-established business that makes supplies of goods or services in the Netherlands must register for VAT if it is required to account for VAT on the supply. Consequently, a nonestablished business must register for VAT in the Netherlands if it makes any of the following supplies:
Intra-Community supplies or acquisitions Distance sales in excess of the threshold Supplies of goods and services that are not subject to the reverse charge

A non-established, non-EU business must register for VAT in the Netherlands if it makes any of the following supplies:
Telecommunication services Electronic services Radio and television broadcasting services Leasing of movable goods to private individuals
9

VAT Recovery
Input tax is generally recovered by being deducted from output tax, which is VAT charged on supplies made. Input tax includes:
VAT charged on goods and services supplied in the Netherlands, VAT paid on imports of goods and VAT self-assessed on the intra-Community acquisition of goods and Reverse-charge services

A valid tax invoice or customs document must be kept in the accounts to support a claim for input tax. Non deductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for business purposes.
A maximum limit of 227 annually applies to the value of expenses incurred per employee on which input VAT may be recovered,
10

Partial exemption
When a business deals with both taxable supplies as well as exempt the Input tax incurred in taxable supplies is recoverable while with exempt its non recoverable, this is known as partial exemption and is calculated in following way:
Identify the input VAT which is allocated to taxable and to exempt supplies. Input tax allocated to taxable supplies is deductible, while the other is not. Identify the amount of the remaining input tax (general business overhead) that may be allocated to taxable supplies and recovered.

First

Second

The calculation is based on percentage of the values of taxable and exempt supplies made in the period and is rounded to nearest Calculation whole number, other methods of apportionment can be used.
11

Capital goods
Capital goods are items of capital expenditure that are used in a business over several years. Input tax is deducted in the VAT year in which the Capital goods are acquired. The amount of input tax recovered depends on the taxable persons partial exemption recovery position in the VAT year of acquisition. However, the amount of input tax recovered for capital goods must be adjusted over time if the taxable persons partial exemption recovery percentage changes during the adjustment period. In the Netherlands, the capital goods adjustment applies to the following assets for the number of years indicated:
Immovable property: adjusted for a period of 10 years; Adjustment=1/10 Movable property:adjusted for a period of 5 years; Adjustment=1/5
12

Refund application
Deadline for Refund

30th September of 3 months the year following the year in which the input tax is incurred.

Minimum claim period Maximum Claim period Minimum Claim Amount 1 year

400 for a period of less than a year 50 for annual claims

Claims may be submitted in Dutch, English, French or German.

13

Repayment interest
VAT Refund: Registered person/entity can claim VAT back on the purchases made for the business Time limit for Refund: 4 months and 10 days after the date on which the refund claim is submitted. In the case of a late refund, the claimant is entitled to interest at the government interest rate in force at the time, in addition to the repayment.

14

Invoicing
VAT invoices:
A taxable person must generally provide a VAT invoice for all taxable supplies made, including exports and intra-Community supplies. A VAT invoice is required to support a claim for input tax deduction or a refund Invoices are not automatically required for retail transactions, unless requested by the customer. However, the issuance of invoices for wholesalers is required.

Retention Period:
Taxable persons must retain invoices for 7 years. For real estate, a taxable person must retain the invoice for 10 years.

VAT Credit Note:

A VAT credit note may be used to reduce the VAT charged and reclaimed on a supply. It must be cross-referenced to the original VAT invoice.
15

Proof of exports and intra-Community supplies

VAT is not charged on the exported goods or on the intra-Community supply of goods. However, Proof of the documents are required.
Exports
Customs document Transport document Order forms Proof of payment issued by a foreign bank

Intra community supply

Copy of invoice having VIN Purchase orders Transport Documentation Proof of payment Contracts

Foreign-currency invoices. A VAT invoice must be issued in euros. If it is issued in another currency, the VAT amount must be indicated in euros, using the daily conversion rate. 16

VAT Return and payments

The return must be filed by the last day of the month following the end of the reporting period. Non-established businesses registered for VAT: Must file their VAT returns and pay VAT due before the last business day of the second month after the reporting period. Return liabilities must be paid in euros.
If the amount of VAT payable (that is, output VAT less input VAT) exceeds 15,000 on a quarterly basis..

Monthly

Quarterly

If the amount of VAT payable does not exceed 15,000 annually.

Annually

If the amount of VAT payable is less than 1,883 annually.

17

Penalties
Penalties

Late submission of a VAT return

For errors in the payment of VAT Maximum fine is 10% of the VAT due, up to a maximum amount of 4,920

For the late payment of VAT Minimum fine is 50, and the maximum fine is 2% of the VAT due, up to a maximum amount of 4,920.

Maximum fine is 62.50

If the late payment is caused by negligence or dishonest conduct, fines ranging from 25% to 100% of the VAT payable may be imposed.

18

E-commerce activities
Obliged to charge VAT to that customer at the rate applicable in the country of the customer Non Taxable Person in EU E commerce business outside EU

Special VAT rules to the e-commerce activities. Digital services include the electronic transmission of software, games and information in a broad sense, as well as the subscription to radio and television channels, pay per view and other services supplied online via (international) databases and networks.
19

Export and Import

Export
When you purchase goods from outside EU, these goods are subject to VAT at the moment the goods are imported in The Netherlands. When you import goods from a supplier in another EU member state the goods will in general be subject to Dutch VAT. mport6

Import
Supplies of goods to customers outside the EU are in general not subject to VAT. For supply of goods to customers (entrepreneurs) in other EU member states (so called intra community supply) conditionally you are entitled to the 0%-rate.
20

Time of supply
The time when VAT becomes due is called the time of supply. The time of supply for goods is when the goods are delivered. The time of supply for services is when the service is completed
In the Netherlands, an invoice must be issued before the 15th day of the month following the month in which the supply takes place. The actual tax point becomes the date on which the invoice is issued. However, if no invoice is issued, tax becomes due, at the latest, on the day on which the invoice should have been issued. If the purchaser is not a taxable person, the tax becomes due on the date of the supply. If the consideration is paid in full, or in part, before the invoice is issued, the actual tax is due on the date on which payment is received (for the amount received). However, some taxable persons are permitted to account for VAT on a cash basis (cash accounting). If cash accounting is used, the tax point is 21 the date on which the payment is received.

Time of Supply
Prepayments
If the consideration in installments or makes a prepayment, the supplier must issue an invoice for each installment .The TOS is the date of the invoice. The TOS is the 15th day of the month following the month in which the acquisition occurred. If the supplier issues an invoice before this date, the time of supply is when the invoice is issued. The TOS is the date of importation or the date on which the goods leave a duty suspension regime. However the payment can be delayed if taxable person applies for postponed accounting where import VAT is reported on persons VAT return.

IntraCommunity acquisitions Imported goods and postponed accounting

A non-established business must appoint a tax representative resident in the Netherlands to use the postponed accounting facility. 22

Point of supply in services

Whether you owe VAT when rendering these services depends on whether the services is rendered in Netherlands.
Services are liable for Dutch VAT only if they are performed in the Netherlands. The basic rule is that services are provided at the place where the supplier is either resident or established.

The following services, amongst others, are excepted from this rule: Services related to immovable property are considered according to destination principle. Services related to culture, sports, education, entertainment are considered according to destination principle. Consultancy, advertising and employment services are considered according to origin principle. Intra-Community freight transport is considered to take place at the point where the journey commences. If the customer has a VAT identification number issued by a Member State other than the Netherlands, the point of supply is considered to be in the 23 other Member State.

Point of supply in services

However, if the VAT owed is levied from the buyer of the services the supplier will not owe any VAT.
If you perform services in the Netherlands as a non-resident entrepreneur, you do not normally have to deal with VAT, because the levy of VAT is often transferred to the buyer of the service.

Example The buyer of the service is an entrepreneur who is based in the Netherlands or has a permanent establishment in the Netherlands; or The buyer of the service is a corporate body based in the Netherlands.
If you are a non-resident entrepreneur supplying services in the Netherlands,(as the customer is a private individual;) and you need to pay VAT yourself.
24

Point of supply in Goods

If you buy goods in the Netherlands and they remain in the Netherlands after purchase, the supplier will charge you VAT. You can deduct this VAT charge as input tax, unless you are intending to use the goods for private use or its an exempt item:

If you buy goods with the intention of subsequently transporting them to another EU Member State, e.g. to a company of your own located in an EU Member State, the supplier is considered to perform an intra-Community supply. He does not charge you any VAT as the supply is zero-rated.

If you buy goods from another E.U country, and transfer these goods to the Netherlands, your liability for VAT in the Netherlands will depend on whether the buyer of the goods is already known.
25

Point of supply in goods

If the buyer of good is not knownYou will owe VAT. You will have to register with the Dutch Tax and Customs Administration. You will then be assigned a Dutch VAT identification number, which you should pass on to your supplier. In that case, your supplier need not charge you any foreign VAT. The VAT you owe because of the intraCommunity acquisition should be paid on return. You can deduct this VAT again as input tax in the same return, in accordance with the applicable rules.

If the buyer of goods in known and has a VINThe procedure is different as you are only delivering them to the buyer. If the buyer is buying the goods for business purposes, he is considered to perform an intra-Community acquisition in the Netherlands for which he is liable for VAT. You, in turn, are considered to perform an intra-Community supply in the Member State where you are established or from which the goods originate. In this case, the buyer must give you his VAT identification number.

If the buyer of goods in known but does not have VINIf you run a business in an EU country other than the Netherlands and you sell goods to private individuals or other persons without a VAT identification number in the Netherlands, you should charge VAT in the country where your business is established.

26

Distance sales
If you run a business in an EU country other than the Netherlands and you sell goods to private individuals or other persons without a VAT identification number, you should charge VAT in the country where your business is established.

If you meet the following two conditions, however, you are performing distance sales and should pay VAT in the Netherlands on these sales: You deliver the goods to the buyer in the Netherlands. You can do this yourself, but also instruct another business to do this on your behalf. The main point is that the goods were transported by you or at your expense. The total amount of the sales to Dutch private individuals or other persons without a VAT identification number during a calendar year should exceed 100,000.
27

A Case in point of supply

You buy goods in China and import them into the Netherlands. You then transfer the goods to a business of your own in France. This means that the import of the goods into the Netherlands is followed by an intra-Community supply. You are required to declare the intra-Community supply in the Netherlands, but may at the same time deduct the VAT you were charged on the import transaction. You are also required to submit a Declaration of IntraCommunity Supplies for the quarter in which you transferred the goods to your own business in France. You should state your French firm's VAT identification number in this Declaration.
28

Thank You

29

VAT in PeopleSoft

By Vikas Marwaha Manoj Singh 1

VAT automation through PeopleSoft

Recording
Charging VAT to customers, Paying VAT to suppliers and recording VAT collected VAT paid.

Calculating
Determining recoverable VAT paid on purchases to offset the amount of output VAT that must be sent to VAT authorities.

Accounting
Accounting for and reporting both the VAT paid on purchases and the VAT collected on sales.

4P concept for VAT automation

Process (Sales/Purchase/ acquisition) Parties (VAT registered/Not registered) Product (Goods/Service)

Determine tax regime. Applicable taxes. Tax status and rate. Taxable basis. Calculating tax amount

Places (within EU/outside EU)

3

VAT Report generation in PeopleSoft

VAT Transaction Type VAT Code VAT authority VAT Country VAT entity VAT a/c by business unit Business unit inter-unit pairs VAT apportionment

VAT amount on the transaction is calculated

A/c to which VAT to be posted

VAT report definition VAT transaction report set up VAT return XML tags

Reports

VAT configuration in PeopleSoft

Define VAT transaction types Set up VAT authorities and tax codes Define VAT countries Set up VAT entities Define VAT use types and apportionment Establish VAT defaults Define VAT on inter-unit transactions Load the VAT transaction table Generate VAT reports
5

Define VAT transaction types

VAT transaction types are used in VAT report definitions and accounting to describe specific types of transactions. Navigation: Set Up Financials/Supply Chain, Common Definitions, VAT and Intrastat, Value Added Tax, VAT Transaction Type VAT transaction types do not control any transaction processing. They are used only to categorize transactions for accounting and reporting.
Set Up Financials/Supply Chain Common Definitions VAT and Intrastat Value Added Tax VAT Transaction Type Add new Define VAT Transaction type Write Description and save it.

VAT authority and VAT code

VAT Rate Account information

VAT Authority

VAT Code

VAT Authority and VAT code basically links applicable VAT rate to a transaction with account to which it should be posted

Set up VAT Authority

VAT authorities are used to define VAT rates. VAT authorities are associated with VAT codes, which are then used to specify the rate at which VAT is calculated on a given transaction line Effective date: like in UK from 2011 onwards std. VAT rate is 20%.
Value Added Tax

VAT Authority

Add new

Define code for VAT authority like UK1 for UK std. VAT rate

Write Description

Mention effective date and respective VAT rate

8

Set up VAT Code

To balance VAT account balances in PeopleSoft GL with the VAT return, VAT must be accounted for separately for each VAT rate. Like input non-recover credit and input recoverable credit should be posted in different accounts. One can also use Express VAT Code page to define the VAT authority and VAT code at the same time. But it is used to link one VAT code to one authority
Value Added Tax VAT Code Add new Define VAT code like UKStd. for UK std. VAT rate applicable transactions

Write Description Link it to VAT authority like UK1 for linking it to UK std. rate Go to Account information page and link it desired account
9

Defining VAT Countries

A VAT country is a country that has VAT and where either your organization has a presence or where you have a trading partner. Country-specific VAT rules are defined here. System uses this option to determine which rules are applicable on which type of transaction. Track VAT at a sub-country level by option like Track VAT by Province
Value Added Tax VAT Country Options Add new Define VAT Return ID Type & EC sales list type as local or VAT Define Treat Exported Service As option as zero rated or out of scope Enter Service For Foreign Buyer as domestic or deemed export Record VAT on Import Goods As Input or Input/ Output Tick the appropriate option like Apply Domestic Reverse Charge
10

VAT Entities
VAT entities are the level within your organization at which the VAT return is filed.
Asset Management Order Management Purchasing General Ledger Business Unit VAT Entity

Billing Receivables

General Ledger business units link VAT entity to other VAT-enabled PeopleSoft applications 11

Defining VAT entity

Setting up a VAT entity, involves entering countryspecific VAT information like where the VAT entity is registered, and whether the organization has been granted any kind of exonerations or suspensions from paying VAT
Value Added Tax VAT entity Add new Select the country where you are registered Enter the VAT R.No. and local VAT ID Select the applicable a/c scheme: Cash/Accrual Link it to the GL Business Unit/Units Enter any VAT Exception Details (if any) Enter name, address in VAT report details
12

Defining VAT Use Types

VAT use is one of the main determinants in the recoverability of input VAT. Here define the percentage of transaction of taxable and exempt category. System allows user to define the percentages using User type or Mixed Apportionment. In mixed apportionment, percentages are based on mixed-use apportionment by general ledger business unit or ChartField.
VAT Use Type

Select Use type as mixed apportionment or use type (coefficients for VAT recovery for France) If use type is selected then enter the percentages

If mixed apportionment define chartfield

13

Defining VAT Apportionment

VAT apportionment can be based on the business unit or the ChartFields to which the purchase or expense is charged. The Chartfield can be set as department, division project etc. The system actually tracks priority 1 & 2 for a given transaction to carry out the apportionment.
VAT Apportionment Set Chartfield priorities Enter the priority values in the chartfield Set the taxable and exempt activity % in the chartfield Department VAT Apportionment: Track efficiency and recoverability of Usage Project
14

Defining VAT inter unit transactions

To Manage VAT on interunit transaction
VAT accounting entries for inter-unit transactions Set ID
Distribution Line GL Business Unit: Allows the specified type of accounting entry to be posted to the GLBU on the associated distribution line.

Access the Business Unit Interunit Option page

Select Inter-entity GL-BU or Intra-entity GL-BU option.

Transaction (header) GL Business Unit: Allows the specified type of accounting entry to be posted to the GLBU on the associated with transaction.

Select distribution GL business or Transaction GL business option

15

Loading VAT transaction table

The VAT transaction table stores the detailed transaction information required for VAT reporting It is the primary source of information for all VAT reports. For each product, the transaction loader uses a VAT transaction source definition to determine what information to select from which tables.
Access the VAT Transaction Loader Rqst page

Select the VAT entity for which VAT transaction data is to be loaded.

Select product/products for which process needs to be carried out. Specify the PeopleSoft application or applications for which process needs to be carried out.

Specify the business unit or units for the process

16

VAT Reports
PeopleSoft allows the user to generate various VAT reports:
Reports Predefined VAT returns A VAT transaction SQR (Structured Query Report) report (VAT0150.SQR). Description

This report lists all VAT transactions for the selected period by customer, vendor, and other sources. This report lists all sales made to customers in a foreign country within the A report for the EC Sales List. EU. This is a Mandatory Report. This report lists domestic business sales subject to domestic reverse charges, and the VAT due from the purchasers on UK Reverse Charge Sales List. these sales. This is a Mandatory Report. A VAT transaction BI Publisher report for details of the accumulated amount on each VAT report line. VAT reconciliation reports. For tax auditing purposes. This is a VAT audit file extracts and reports. Mandatory Report.
17

 Thank You

18

Parameters Date introduced Administered by Annual Tax declaration deadline Standard Reduced Other VAT number format Monthly Quarterly Annually

Comparison between UK and Netherlands VAT System UK General Information 1-Jan-69 1-Apr-73 Ministry of Finance (http://www.minfin.nl) Revenue & Customs (http://www.hmrc.gov.uk) March Not Applicable VAT rates 19% 20% (effective from 4 January 2011; 17.5% prior to 4 January 2011) 6% 5% Zero-rated and exempt Zero-rated, exempt and exempt with credit NL1 2 3 4 5 6 7 8 9 B 01 GB 999.9999.99 VAT return periods If the amount of VAT payable exceeds 15,000 per quarter General rule If the amount of VAT payable does not exceed 15,000 per quarter If requested by a business that receives regular repayments Netherlands If the amount of VAT payable does not exceed 1,883 per year Items Covered in different Categories

Remarks

In Netherlands it is possible to have annualised VAT returns Fuel and power supplied to domestic users and charities ,Installation of energysaving materials,Building materials for certain residential conversions,Sanitary protection products,Childrens car seats,Smoking cessation products,Grantfunded installation of heating appliances and qualifying security goods.

Broad Category of Items Covered in Reduced Rates

Foodstuffs, Books, Paintings and other cultural goods, Goods and services used by the agricultural sector, Passenger transport, Hotel accommodation

Broad Category of Items Covered in Zero Rate Regime Broad Category of Items Covered in Exempt regime

Books, newspapers and periodicals, Certain foodstuffs, Childrens clothing and Exports of goods, Intra-Community supplies of goods, Supplies to ships and aircraft used for footwear, Drugs and medicines, New housing, Transport services, Exports of international transportation goods and related services Supply of immovable property, Medical services, Finance, Insurance, Betting and gaming, Education Thresholds Betting and gaming, Education, Finance, Insurance, Land (in most cases), Postal services (in most cases), Human blood products, Medical services

Registration Deregistration Distance selling Intra-Community acquisitions Recovery of VAT by nonestablished businesses

None 100,000 10,000 (for exempt taxable persons and nontaxable legal persons) Yes Scope of VAT 1. The supply of goods or services made in the Netherlands by a taxable person, 2. The intra-Community acquisition of goods from another EU member state by a taxable person. 3. The intra-Community acquisition of goods from another EU member state by a nontaxable legal person in excess of the annual threshold 4. Reverse-charge services received by a taxable person and nontaxable legal entities in the Netherlands 5. The importation of goods from outside the EU, regardless of the status of the importer

70,000 (effective from 1 April 2010) 68,000 (effective from 1 April 2010) 70,000 70,000 (effective from 1 April 2010) Yes

huge variation in registration thresholds

Scope of VAT

1. The supply of goods or services made in the United Kingdom by a taxable person 2. The intra-Community acquisition of goods from another EU member state by a taxable person 3. Reverse-charge services received by a taxable person in the United Kingdom 4. The importation of goods from outside the EU, regardless of the status of the importer

Parameters

Claim Time Limit

Comparison between UK and Netherlands VAT System UK VAT Refund/Reclaim Rules Properly completed applications must be submitted to the Member State of The application must cover a period of not less than three consecutive calendar months in Establishment at the latest on September 30th of the calendar year following the refund year. one calendar year and not more than one calendar year. Netherlands

Remarks

Non-refundable VAT

1. Supplies of goods and services that are not used for business purposes; 2. Supplies and services acquired or imported in connection with an exempt business activity; 3. Food and drinks in restaurants, hotels and cafes; 4. Business entertainment in excess of 227 euro a year per person; 5. Employee benefits in kind in excess of 227 euro a year per person; 6. The VAT on costs for the lease or rental of cars will in practice be limited to an 84% VAT refund (a 16% correction is made for private use). If the application relates to a period of less than one calendar year but not less than three months, the amount for which application is made may not be less than EUR 400; if the application relates to a period of a calendar year or the remainder of a calendar year, the amount may not be less than EUR 50. Taxable persons established in the Netherlands (including fixed establishments) may form a VAT group if the members are closely bound by financial, economic and organizational links.

1. Non-business supplies 2. Supplies which the claimant intends to use for carrying out of an economic activity in the UK or which the claimant intends to export from the UK. 3. Business entertainment and hospitality expenses and other expenses on which the recovery of VAT is restricted in the UK. 4.Goods and services you have bought for resale. 5. Amounts of VAT which have been incorrectly invoiced, or wrongly charged. 6. The purchase or import of passenger motor vehicles, unless used wholly for business purposes; 7. Certain second hand goods,for which no tax invoices will be raised. If the application relates to a period of less than one calendar year but not less than three months, the amount for which application is made may not be less than 295; if the application relates to a period of a calendar year or the remainder of a calendar year, the amount may not be less than 35. Corporate bodies that are under common control and are established or have a fixed establishment in the United Kingdom may apply to register as a VAT group. 1. Goods located in the United Kingdom at the time of supply 2. Intra-Community acquisitions of goods 3. Distance sales of goods to U.K. residents who are not taxable persons 4. Services to which the reverse charge does not apply 1. Land and buildings and related property expenditure valued at 250,000 or more: adjusted over a period of 10 years 2. Computer hardware valued at 50,000 or more: adjusted over a period of five years 3. Ships and aircraft valued at 50,000 or more: adjusted over a period of five

Minimum Reclaim amount

Group registration

Conditions for mandatory registration of non established businesses

1. Intra-Community supplies or acquisitions 2. Distance sales in excess of the threshold 3. Supplies of goods and services that are not subject to the reverse charge 1. Immovable property: adjusted for a period of 10 years 2. Movable property subject to depreciation for income tax purposes: adjusted for a period of five years

VAT on capital goods