VAT(Value Added Tax)

VAT : What we know so far


The VAT Framework Agreement aims to implement a registration threshold of

The VAT will be charged at a standard rate of 5 % unless the goods or services are exempt/Zero rated by individual member states.
The following categories of supplies will be exempt from VAT

The following categories of supplies will be Zero rated:

VAT registered businesses will be able to reduce their output tax liability by the amount of VAT that relates to bad debt which has been written off by the VAT registered business. The legislation will include the conditions and limitations concerning the use of this relief.

VAT input tax refund can be claimed only on the amount paid or intended to be paid before the expiration of 6 months after the agreed date for the payment of the supply.

The VAT Framework Agreement will require records to be kept by a business to ensure accurate tax compliance. This would imply maintenance of books of accounts and associated documents required to verify entries, such as:

Any other information as direct by the FTA that may be required to confirm an individuals liability to tax, including any liability to register.
Any taxable person must retain VAT invoices issued and received for a minimum of 5 years. A VAT invoice should have the following minimum details:


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