Tax topic
VAT
Value added tax: registration and deregistration, VAT on sales and purchases, deductible and payable VAT, filing, rates and exemptions, imports and exports, credits, refunds and the purchase and sales ledgers.
Key issues
- Registration and deregistration
- VAT on sales and purchases
- Deductible and payable VAT
- Filing
- Rates and exemptions
- Imports and exports
- Credits and refunds
- Purchase and sales ledgers
Frequently asked questions
Short answers to the questions businesses ask us most often on this topic. Treatment can differ for each business. For your case, write to us.
A business must register for VAT when its turnover exceeds the threshold set in the law, and in other cases the law specifies regardless of turnover. A business can also apply for voluntary registration.
Payable VAT is the VAT a business charges on its sales. Deductible VAT is the VAT paid on purchases used in its taxable activity. The business pays the state the difference between the two.
When the purchase is used for taxable activity, the invoice is valid and fiscalized, it is recorded in the purchase ledger, and it does not fall into a category for which the law denies deduction. The deduction must be made within the period the law allows.
The difference becomes a VAT credit, carried forward and offset against payable VAT in later periods. When the law's conditions are met, the business can ask for it to be refunded.
On imports, VAT is paid at customs and, if the goods are used for taxable activity, deducted as input VAT. Exports of goods are generally not charged VAT but keep the right to deduct, provided they are documented with the customs declaration.
Some services are exempt, such as financial, insurance, health and education services. Some supplies have a reduced rate, and cross-border services follow place-of-supply rules, often with reverse charge.
Related articles
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