vat 101: understanding the basics (2)
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VALUE ADDED TAX 101UNDERSTANDING THE BASICS
VAT is a transaction based tax that applies to local goods and services, and imports of goods and services.
There are VAT various rates around the world, with no set limits.
It is a self assessed tax, meaning taxpayers are responsible for
charging, collecting and remitting taxes to the authorities.
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Registration requirements differ from country to country, and numerous tax
authorities operate special schemes for certain sectors, traders or those operating
beneath certain thresholds.
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of companies we asked said knowing where VAT transactions are taxed is their biggest indirect tax concern.
45%Listen to the webinarListen to the webinar
Where transacitons are taxed is determined by a number of factors. Who are you selling to?
Are you selling goods or services?
If you are selling services, how are they delivered?
Where is your customer based?
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There are a number of risks associated with VAT, such as those related to compliance, documentation, new revenue streams, and one-off and
unique transactions.
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Want to keep it simple?
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The following question will always help you grasp what is happening and how that may
impact the VAT position ...
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WHO IS SUPPLYING WHAT TO WHOM
AND WHERE?
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Who: Which entity or person is contracted to make the supply?
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What is being supplied – goods or services?
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Whom is the recipient of these supplies and what is their
status?
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Where is the supplier located, the location or movement of the goods, the location of service performance or the location of the customer or recipient?
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There are also a number of common misconceptions to be aware of, such as ...
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US companies do not incur VAT or GST.”
Common misconception
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Cost plus revenue does not attract VAT or GST.”
Common misconception
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VAT and GST are just recovery mechanisms for getting tax back.”
Common misconception
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If you incur VAT you must charge it on.”
Common misconception
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A failure to recognize the impact of VAT on global operations may
result in significant financial penalties, interest and hidden
VAT costs ...
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... but with proper planning, VAT can be minimized.
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An indirect tax or VAT ‘health check’ review is a good first step as it will often
highlight risks and opportunities.
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Want to make your VAT strategy as efficient as possible?
Connect with Radius:US: +1 888 881 6576 UK: +44 (0) 203 005 5518
info@radiusww.comwww.radiusworldwide.com
Radius helps companies expand and win globally.
Want to make your VAT strategy as efficient as possible?
Connect with Radius:US: +1 888 881 6576 UK: +44 (0) 203 005 5518
info@radiusww.comwww.radiusworldwide.com
Radius helps companies expand and win globally.
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