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Posted on 29-Jan-2018 03:22 AM

Contracts that are signed prior the implementation of Value Added Tax (VAT) on January 1 2018 that do not specify the payment for VAT are treated as exclusive of VAT if:

  • Recipient of the goods or services is a registrant; and
  • Recipient can recover the input tax incurred on the supply in full or part.

This is only applicable if the supplier has requested the following information from the recipient before January 1st of 2018.

  • Recipient are or expect to be a registrant on 1 January 2018; and
  • To which extent the recipient is expecting to recover their input tax on the supply.

The supplier must confirm this information mentioned above before January 1, 2018; in the event where the recipient fails to provide the requested information within 20 business days, the supplier then, may treat the contract as exclusive of VAT.

A copy of both request and response from supplier and recipient respectively, are recommended to keep as part of the supplier’s VAT records.

Otherwise, the contract will be treated as inclusive of VAT if the supplier failed to request these required information to the recipient prior the implementation of VAT on January 1, 2018.

Therefore if your customer is TRN registered and can recover their input VAT, the supply can be considered as excluisve of VAT.


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