Is it time for a VAT health check?

Understanding VAT rules, so complex in nature, is not easy for businesses. The unique structure of the EU VAT system, such as the treatment of cross-border transactions, plus the continuous evolvement and modernisation of the VAT rules, makes this task even more demanding. The globalisation of business, the proliferation of certain products, such as gaming, and the near total adoption of digitalised processes has further increased the absolute need for businesses to ensure that from a VAT perspective they are always on the right track. Whilst in principle VAT should be neutral for businesses, yet certain slips, intended or not, could be very costly and are best avoided. It is for this reason that a regular VAT health check is highly recommended for businesses.

Our VAT team will carry out spot checks and verifications to review the practices and processes in place to ensure, both from a VAT legal and practical viewpoint, that the VAT obligations are being fully and correctly complied with and where not to highlight any gaps or omissions that require rectification.

The VAT health check aims to ensure that:

• Business transactions are correctly treated for VAT purposes
• VAT is charged, levied and accounted for at the right time and at the appropriate rate of VAT
• Tax invoices/fiscal receipts are materially correct and are issued to customers in the manner as prescribed in the regulations
• Tax invoices received from other taxable persons are correct and valid to support any input VAT being claimed
• VAT returns are submitted on time with full payment where the case
• All VAT related transactions are faithfully and correctly reported in the VAT return for the relative tax reporting period
• Where required recapitulative declarations are duly furnished to CfR
• For intra-community transactions the pertinent NSO Intrastat form is submitted
• Input VAT is correctly claimed, excluding blocked items and where the right of deduction is limited the partial attribution method is being correctly applied
• All documentation connected to the business is recorded, stored and retained for the statutory period as prescribed in the VAT Act.

Interested? For more information please contact Brandon Gatt or Christabel Spiteri who will assist you accordingly.