The moment when you are VAT registered seems like conquering the top of a mountain. And like everyone else you think you’re finally done with the well-known nightmare: VAT registration. Then suddenly one by one, the question arises:
The continuation of this text is for those of you who had this difficulty. And decided that your knowledge, it is the basis of understanding your future business and finances.
– А supply refers to goods or services that are exchanged for consideration. This exchange happens through transactions between two persons. At least one is a registered taxpayer. Buying, selling, and stock transfers are all supplies, even if there is no exchange of money. This means, whenever goods or services are supplied by a registered person, 5% VAT needs to be charged if its not zero rated supply or exempt.
A supply under VAT has three attributes that we use to calculate the tax:
When we talk about types of supply under VAT, we can find several different divisions:
Normally the taxable person providing supplies to customers is responsible for charging VAT. He or she is also liable to pay the VAT charged to the tax authority. Under the reverse charge mechanism, the buyer or end customer pays the tax directly to the government. The main difference between a reverse and forward charge is the change in responsibility with regards to paying VAT. In a reverse charge, the buyer the goods or services has the responsibility of it, not the seller.
You can apply for reverse charge in these circumstances:
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