Transcript No Slide Title

PARTIAL ATTRIBUTION
OF INPUT TAX
Principle
Article 22(5) VAT Act
Item 5(3) Tenth Schedule
The proportion of deductible VAT is determined for all the tax
periods ending during a calendar year according to a special
calculation taking into account supplies opening right to deduct
VAT and other supplies
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Principle and calculation
Article 22(5) VAT Act
Item 6(1)(a) Tenth Schedule
Supplies with right to deduct “V22(4)”
----------------------------------------------------------------------------------X 100
Supplies with right to deduct “V22(4)” + other supplies = Vall
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Principle and calculation
Article 22(5) VAT Act
Item 6(2) Tenth Schedule
The calculation does not include:
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•
the value of any supply of capital goods used in the
economic activity of the taxable person
•
the value of self-supplies
•
the value of any supply which is not made by a taxable
person acting as such
Definitive and provisional ratio
Article 22(5) VAT Act
Item 6(1)(b) Tenth Schedule
The result obtained shall be:
– The definitive ratio for the tax periods ending during this
calendar year
– The provisional ratio for the following year (= the next tax
periods ending during the following calendar year)
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Use of provisional ratio
Article 22(5) VAT Act
Item 6(1)(c) Tenth Schedule
The ratio calculated for the previous year shall be used as the
provisional ratio for the tax periods ending during the following
year
Total input tax is multiplied by this provisional ratio
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Use of definitive ratio
Article 22(5) VAT Act
Item 6(1)(d) Tenth Schedule
The total input tax credit for all the tax periods ending during the
following calendar year shall be calculated definitively by
multiplying the total input tax for those periods by the definitive
ratio for that year
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Difference
Article 22(5) VAT Act
Item 6(1)(e) Tenth Schedule
The difference between the input tax provisionally deducted and
the definitive calculation shall represent:
– Either a tax due
– Or a deduction allowable
– To be accounted for in the tax return for the first tax period
that ends in the year following that for which the provisional
calculation was made or in case of cancellation of
registration in the last tax period
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Calculation of the definitive ratio and
regularisation - Methodology
1. Classification in output and input operations
2. Classification in supplies with credit and other supplies +
elimination of the amounts not taken into account
3. Eliminate the expenses not related to the economic activity
(exclude VAT) or on which no VAT was due
4. Comparison and calculation of the ratio (fraction = percentage)
5. Application of the ratio to the amount of input tax
6. Comparison between the provisional ratio and the definitive ratio
7. Regularisation
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Alternative methods: real use and
specific calculations of ratio
Article 22(5) VAT Act
Item 8 Tenth Schedule
Where it appears to the Commissioner that the method of
attributing input tax according to the partial attribution
method does not give a fair and reasonable result, he may
by notice in writing to a registered person direct that the said
method shall not apply to the attribution of input tax to the
supplies of that person and that person shall adopt such
other method of partial attribution as the Commissioner may
prescribe
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