VAT Deductions

Who is it for?

This is an introductory course for those involved in preparation of a VAT return or else in the daily posting of invoices and required to determine whether VAT incurred on purchases and overheads can be claimed back or otherwise.

Why Should You Attend?

VAT is a tax on the consumer and should therefore not constitute a cost to businesses. This is ensured by the right to deduct input VAT incurred from output VAT charged to customers. This right is further enhanced by the right to claim a refund in the eventuality that input VAT exceeds output VAT. Not applying the rules correctly may result in under-claiming or over-claiming back input VAT, with the financial cost tied to both.

Learning Objectives:

The seminar will look at the main provisions dealing with input VAT recovery, explaining what determines the right to deduct input VAT, what VAT may never be deducted, and also discusses the powers of the Director General (VAT) and the penalties which can apply if VAT returns are incomplete or inaccurate.

Areas Covered in the Seminar:

• What is input VAT?
• Which supplies are taxable, exempt with credit and exempt without credit?
• What should appear on a VAT invoice?
• What are disbursements?
• What is required to reclaim input tax?
• What are the rules relating to motor cars?
• Under what circumstances can you recover VAT on entertainment expenses?
• How do you calculate the amount of input VAT you can reclaim if Partial Attribution applies?

Legal background

• Value Added Tax Act, Chapter 406 of the Laws of Malta
• Value Added Tax (Adjustments relating to Input Tax on Capital Goods) Regulations

The format of the sessions will be a presentation involving numerical examples with opportunities for discussion and questions.

Who will Benefit?

• Accountants,
• Corporate Services providers
• Anyone involved in the posting invoices and preparation of a VAT return

Topic Background:

A taxable person is allowed to deduct the VAT he paid on his purchases insofar as the goods or services are used for his business activities. The recovery of VAT is done through the attribution method, where input VAT is attributable to the supplies of the taxable person. It follows that VAT can be claimed back according to the nature of the supplies to which it relates to. The right to claim back VAT means that VAT should not represent a cost to businesses, but in certain circumstances, VAT does indeed end up being a non-recoverable cost to businesses.

Trainer Profile:

Chris Pace qualified as an accountant from The University of Malta in 2006, and obtained the diploma in taxation in 2008 from the Malta Institute of Taxation. He has spent more than eight years working in the tax service line at two of the largest audit firms in Malta, before forming a new firm offering corporate, tax and VAT consultancy services. Chris is an ACCA lecturer with BPP Malta where he lectures the fundamental as well as the professional paper in taxation, has been invited to deliver a number of seminars on tax and VAT related topics, as well as sat on the Taxation Committee of the Malta Institute of Accountants.

He is a member of the Malta Institute of Accountants, a member of the Malta Institute of Taxation and a member of the Institute of Financial Services Practitioners. Furthermore, he is registered as an Authorised Registered Mandatory with the International Tax Unit where he is involved in assisting foreign high net worth individuals obtaining residence in Malta.