Chile VAT Guide - VAT rates, VAT on goods and services, digital services, e invoicing, reverse charges and more. CHILE-VAT The Chilean Tax Authority is known as the (SII). The standard VAT rate in Chile is 19% and applies to most goods and services and there is no VAT registration threshold so VAT becomes due once taxable goods or services are supplied. Some goods and services are exempt from VAT, such as exports, sporting and cultural events, real estate, freight services, used cars and lorries, international passenger transport, and education. E Invoicing Chile requires all invoicing to be electronic and E Invoicing is mandatory for all businesses through its central electronic invoicing system. Non Resident Digital Service Providers Since June 2020, four types of services provided by taxpayers without a domicile or residence in Chile pay Value Added Tax (VAT). Meanwhile, from November 2024, all other taxed services (not expressly exempt) provided by this type of taxpayers must pay VAT. This tax obligation is only for foreign taxpayers, without domicile or residence in Chile, who provide taxed services remotely to be used in national territory by non-VAT payers. Non resident providers are required to register for VAT via the Digital VAT Portal - Servicio Impuestos Internos Services that require VAT Registration and declaration include: Intermediaries of services provided in Chile, whatever their nature, or of sales made in Chile or abroad, provided that the latter give rise to an import. Those who supply or deliver digital entertainment content, such as videos, music, games or other similar content, through download, streaming or other technology, including for these purposes, texts, magazines, newspapers and books. Those who provide software, storage, platforms or computing infrastructure. Those who carry out advertising, regardless of the support or medium through which it is delivered, materialized or executed. Other Services Reverse Charges Applicable to foreign purchases that are taxable where the vendor is not registered in Chile. (Purchaser is responsible for accounting for VAT)

VAT Digital.Com - Recruitment Consultants - Find our List of Key UK & Global Specialist Recruitment Consultants for VAT and TAX Roles along with Links to Their Websites. "Take the heavy lifting out of your role search!" Recruitment Consultants "Take the heavy lifting out of your role search!" Andrew Vinell Recruitment Consultants Andrew Vinell Brewer Morris Carnegie Consulting Creative Tax Recruitment Eximius Goodman Masson Hays Morgan McKinley Michael Page Pure Robert Walters Job Listings efinancialcareers totaljobs VAT Digital. Com The links on this page do not convey any endorsement, authorship or ownership by VATDIGITAL.Com of any of the sites visited. "Take the heavy lifting out of your role search!" Recruitment Consultants - Key Recruitment Consultants for VAT & Tax Roles "Take the heavy lifting out of your role search!" Ambition Andrew Vinell VAT Digital. Com Brewer Morris Carnegie Consulting Creative Tax Recruitment Eximius Goodman Masson Hays Marks Sattin Morgan McKinley Michael Page Pure Robert Walters Tenet Search The Consultancy Group Twenty AI The links on this page do not convey any endorsement, authorship or ownership by VATDIGITAL.COM of any of the sites visited. etaxjobs

Read our guide on intercompany recharging and the implications and UK rules around the application of VAT and the inherent VAT risks and potential impact on P&L. Introduction Inter-company recharges are charges between companies within a corporate group to ensure that costs incurred by one entity on behalf of another entity or shared cost such as IT, Tax, Marketing, HR, Property, etc are allocated to the correct entity. The intercompany recharging process is critical from a : Financial Reporting perspective to ensure that costs sit under the correct Legal Entity to determine its profitability accurately. Corporate Tax Reporting perspective to ensure entities are taxed correctly against their reported profits Transfer Pricing perspective to ensure that the correct transfer pricing adjustments are made to reflect arms length pricing between entities as required by HMRC and outlined under OECD guidelines. Transfer pricing: Methodologies: OECD Guidelines: Overview VAT Allocation perspective to ensure VAT directly applicable to an entity is allocated fair and reasonably to ensure the appropriate VAT recovery rate is applied. Also to ensure that VAT incurred on costs by service companies such as hardware, software, marketing, consulting, HR, etc is allocated to to other corporate and VAT group entity members in line with the Groups VAT Partial Exemption Method. Intercompany Recharges & VAT Issues There maybe VAT implications associated with Inter-company recharges depending on the status of the entities recharging and receiving the recharged costs and the countries they are established in. UK to UK Entity Recharges From a UK perspective, local head-office entities and their local and international branches and visa versa are considered to be the same entity so inter-company recharges between them are disregarded for VAT and thus VAT is not added to the recharged costs. On the other hand, recharges between companies established in the UK where they are not branches of head office subsidiaries or members of a VAT group will incur VAT on recharged costs. Non UK to UK Entity Recharges Most recharged costs for shared services such as IT, Consultancy, HR, Finance etc from a non UK entity to another corporate UK entity will attract UK reverse charge VAT, which means the receiving entity will be required to self account for output VAT at 20% payable to HMRC. The receiving entity will be able to recover some or all of this VAT from HMRC on the same VAT return depending on its Partial Exemption Recovery Rate. So if the receiving entity has a VAT recovery rate of 80% then £80 of every £100 VAT payable to HMRC will be recoverable. UK VAT Groups and Recharges Where UK established companies and their branches are within a VAT Group (see VAT Groups page), recharges between the UK members of the VAT group are disregarded for UK VAT and as such VAT does not need to be added to intercompany recharged costs. This is also the case for non UK established branches and head offices that are members of a UK VAT Group by way of being the same taxable person or entity as their UK established branch or head office entity. For example if UK company A Ltd has a branch A Ltd in India which recharges cost to UK company B Ltd which is in a UK VAT Group with UK company A Ltd, then 20% UK reverse charge VAT will not be applicable. The underlying principle behind this is the whole establishment rule where VAT grouping is not restricted to entities that are located in the UK. Note there is UK anti avoidance legislation in place Sec 432(a) of the VAT Act to prevent overseas branches of UK established VAT Grouped entities "buying in" services from overseas suppliers then recharging them to other UK VAT Group members. Where this occurs, 20% reverse charge VAT is applicable. See below link and the VAT Groups page on this site for more information. VGROUPS01300 - General principles of VAT group treatment Intercompany Recharges - What can go wrong for VAT Due to the complex VAT rules around intercompany recharges and the need for VAT specialist oversight, this can present various risks and result in the incorrect application of VAT. There are a number of scenarios below that illustrate when the correct application of VAT can be wrong. Inter-company recharged costs from overseas entities that are not part of a UK VAT group and the receiving business does not budget for the reverse charge VAT applicable can lead to unforeseen VAT costs where the reverse charge VAT is not fully recoverable and thus results in irrecoverable VAT adjustments in the P&L. This can also lead to the under declaration of VAT to Tax Authority if reverse charge VAT is not applied. Accounts Payable teams that are not fully trained on VAT grouping rules and are unsure as to whether reverse charge VAT codes need to be applied or not within the system, can lead to the under declaration of VAT to Tax Authorities. Intercompany recharges from overseas branches to other UK VAT group members where the underlying supplies have been purchased locally by the overseas branch and it is assumed by the UK company receiving the recharged costs that UK reverse charge VAT is not applicable because the supply is inter-group. Under these circumstances, the anti avoidance rules under Sec 43(2)a as mentioned above will kick in and reverse charge VAT will become applicable. A lack of understanding here, will result in the under declaration of VAT and potential HMRC assessments. Under the VAT grouping rules, companies must have a fixed establishment in the UK to be eligible to be part of a UK VAT group. There are various rules and conditions around what constitutes a fixed establishment and where these are not adhered to, HMRC may opt to de-group or remove UK entities from a UK VAT group where it considers they have not met the conditions for having a UK fixed establishment. Where this happens, HMRC can raise assessments for VAT on any inter-company transactions previously disregarded for VAT. This can lead to significant VAT costs suddenly hitting the P&L. See VAT Groups page for more information and the recent HMRC vs Barclays Bank Plc tribunal case on the VAT news page. Where UK entities recharge cost to overseas entities, UK VAT is not applicable but it is highly likely that the receiving entity may be required to self account for reverse charge VAT locally. Failure of the receiving entity to understand local VAT rules can result in unexpected VAT costs to the overall corporate group. For More information on VAT risks and how to mitigate against them, please see our VAT Risk Page . Situations Where VAT on Inter-company Recharges may not be Applicable Paymaster Services - can involve one company paying salaries and other expenses such as National Insurance and pension contributions. They commonly occur between associated companies in 2 situations where: employees are jointly employed by 2 or more companies and one company undertakes to pay salaries and the other expenses which it then recovers from the other joint employers each of a number of associated companies employs its own staff, but one company (the paymaster) pays salaries and other expenses on behalf of the others who then pay their share of the costs to the paymaster Recovery of money paid out by the paymaster in either of these situations is not subject to VAT as it’s a pay out. Joint Employment - Where staff are jointly employed there is no supply for VAT purposes between the joint employers. Staff are jointly employed if their contracts of employment or letters of appointment make it clear that they have more than one employer. The contract must expressly specify who the employers are for example ‘Company A, Company B and Company C’, or ‘Company A and its subsidiaries’. There is no joint employment where for example there is a contract with one employer: which lays down that the employee’s duties include assisting others that the employee will work full-time for another where the job title shows that the employee works for a group of associated companies (for example a group accountant) Open Government Licence v3.0 , Intercompany Recharges & the VAT Implications

The UK Capital Goods Scheme is a UK HMRC mechanism that impacts the amount of VAT you maybe able to recover on high value assets such as buildings. Find out more. Introduction The Capital Goods Scheme ensures that where businesses acquire or create assets and recover the input VAT from HMRC on the initial purchase upfront, any subsequent change in the entities Taxable sales compared to its total sales (partial exemption recovery rate) is reflected in adjustments to the input VAT initially recovered. As of 29 July 2026, the scheme has been simplified and computer equipment has been removed from the list of assets covered and the threshold for Land and buildings has been increased from £250,000 (exclusive of VAT) to £600,000 (exclusive of VAT). So If for example you purchase a Building for £600,000 plus VAT and recover the VAT in full as your business is only making taxable sales, then the following year your business makes 50% exempt and 50% taxable sales then you will only be able to recover 50% of the VAT as the building is not being used exclusively to make taxable sales. So in effect the VAT recoverable on the asset can increase or decrease over the adjustment period depending on the extent of the use of the asset to make taxable sales. Assets Covered by the Scheme You’ll have to use the Capital Goods Scheme if you spend £600,000 (excluding VAT) or more on: buying land, a building or part of a building or civil engineering work constructing a building or civil engineering work refurbishing, fitting out, altering or extending a building or civil engineering work Civil engineering work includes things like roads, bridges, golf courses, running tracks and the installation of pipes for connecting to mains services. Aircraft, ships, boats and other vessels The scheme applies if you spend £50,000 or more (excluding VAT) on purchasing, constructing, refurbishing, fitting out, altering or extending an aircraft, ship, boat or other vessel. The adjustment periods These are: 5 intervals for computers 5 intervals for ships and aircraft 10 intervals for all other capital items Record Keeping You’re not required to keep VAT records for longer than 6 years. But the CGS requires you to make adjustments up to 10 years later. You should keep records long enough to show us how you calculated each adjustment. Values and definitions What does HMRC mean by ‘capital expenditure This is normally expenditure capitalised for accounting purposes. We’ll not normally challenge your capitalisation policy for the purposes of the CGS, except in cases of avoidance or abuse. In some cases charities may incur expenditure of a capital nature on land and property which is not capitalised in their accounts (for example certain heritage buildings or churches). This is generally because the charity does not have unfettered freedom to exploit or dispose of the land or property concerned. This will not prevent expenditure that’s essentially capital in nature from being adjusted under the CGS. The value of a capital item This is the VAT exclusive value of the item. Only the value of standard or reduced-rated taxable supplies is considered. Before 1 January 2011, the value of a capital item was determined by reference to the business-related expenditure. With effect from 1 January 2011, the value is determined by reference to total expenditure on an asset. This includes both business and non-business expenditure on an asset. Example A business purchases a building for £1 million and incurs £200,000 VAT. The building is to be used for 60% business purposes and 40% non-business purposes (for example, charitable use). Before 1 January 2011, £600,000 (60% of £1 million) determined the value for CGS purposes. Under the new rules that took effect from 1 January 2011, all of the expenditure on the building (£1 million) is the value for CGS purposes. As the CGS threshold for buildings is now £600,000, the building is a capital item in both scenarios. Expenditure incurred on a capital item before and after 1 January 2011 It will be necessary to determine the amount of business-related expenditure incurred on the asset up to 31 December 2010 and the total amount of expenditure (business and non-business) incurred on or after 1 January 2011. If the sum of these amounts exceeds the relevant CGS threshold, the asset falls within the CGS. The adjustable amount of VAT Prior to 1 January 2011, only VAT on the business-related expenditure on an asset (input tax) fell within the CGS. With effect from 1 January 2011, all of the VAT on an asset (in this instance input tax and non-business VAT) falls within the CGS. Example Following on from the example , prior to 1 January 2011, input tax of £105,000 (17.5% of £600,000) fell within the CGS. With effect from 1 January 2011, VAT of £175,000 (17.5% of £1 million) falls within the CGS (£200,000 after the increase in the standard rate of VAT to 20% on 4 January 2011). If expenditure is incurred both before and after 1 January 2011, the VAT on the business-related expenditure incurred up to 31 December 2010 and the total VAT incurred on the asset on or after 1 January 2011 fall within the CGS. Estimate the value If you do not know if a project exceeds the value threshold for the CGS until all invoices have been received you’ll need to estimate the value of the supplies you’ve received. This may happen with construction projects and refurbishments where VAT is incurred over a period of time and also with contracts that include a retention clause. A retention clause involves a proportion of the contract price being held back and only paid when the work has been satisfactorily completed. If, when you start the CGS, you estimate that the value of relevant supplies will exceed the value threshold, the item will become a capital item. Even if you find later on that the value does not reach the threshold, the item remains in the scheme and you should continue to make adjustments as necessary. If you do estimate the value of a capital item you’ll need to keep all the documents you based your estimation on, such as a contract, as our officer may ask to see it. What you should include in the value of land or buildings that you acquire Only include the value of the interest in the land or building supplied to you, if the supply was taxable and not zero-rated. Do not include any associated costs such as legal or estate agency fees. In calculating the value of the interest supplied to you in the land or building, you do not need to include the value of any rent or service charges unless it’s: been paid or is payable more than 12 months in advance invoiced by the supplier for a period of more than 12 months – in that case, you should include the value of rent or service charges when calculating the value of the capital item What you should include in the value of a constructed building or civil engineering work You should include the total VAT exclusive cost of any of the following supplies made to you: the interest in the land, if the supply to you was taxable (other than zero-rated) taxable (other than zero-rated) goods and services supplied for, or in connection with, the construction of the building or civil engineering work You should include all the costs involved in making the building ready, such as: professional and managerial services including architects, surveyors and site management demolition and site clearance building and civil engineering contractors’ services materials used in the construction security equipment hire haulage landscaping fitting out, including the value of any fixtures If you’ve purchased land and constructed a building on it If you’ve purchased land and constructed a building on it, this is treated as one capital item. What to include in the value of an alteration, extension or annex where the value of the Goods and services received is £250,000 or more You should include the total value of all taxable (other than zero-rated) goods or services supplied to you for, or in connection with, the alteration, extension or annex. You should include all the costs involved in making the building or civil engineering work ready. See examples at paragraph 4.7 . What you should include in the value if a capital item is refurbished or fitted out You should only include the value of capital expenditure on the taxable (other than zero-rated) supply of services and of goods affixed to the building or civil engineering work supplied to you for or in connection with the refurbishment or fit out. However, for capital items where the costs are incurred on or after 1 January 2011 there is no longer a requirement for goods used for the refurbishment to be affixed to the building. You should include all the costs involved in making the refurbished or fitted out building ready. See examples at paragraph 4.7 . Goods affix ed’ to the building These are goods which become part of the fabric of the building. Generally these are items that are sold with the property and are not portable or easily removed. ‘Goods affixed’ does not include items secured for safety or security reasons or computers or computer equipment. These may be subject to the CGS in their own right. The following lists will help you to decide if an item is ‘affixed’. This list is not exhaustive and the deciding factor is usually if the item becomes part of the fabric of the building. Common inclusions are: materials to build internal and external walls roofs and ceilings floors and hard flooring permanent partitioning windows lifts ‘built in’ storage such as cupboards or shelving air conditioning lighting decorative features Common exclusions are: office furniture storage unless it’s ‘built in’ carpets computers and computer equipment factory and office machinery Again, this list is not exhaustive. For capital items where the capital costs are incurred on or after 1 January 2011 there is no longer a requirement for goods used for a refurbishment to be affixed to a building. For capital items where the capital costs were incurred before 1 January 2011, this treatment is already allowed in relation to the ‘goods affixed’ condition by concession and is adopted by most businesses. If the refurbishment is in phases If you do this you’ll need to decide if the work should be treated as a whole for CGS purposes or if there’s more than one refurbishment. If you think that each phase is really a separate refurbishment then they should be treated separately for CGS purposes. Normally there’s more than one refurbishment when either: there are separate contracts for each phase of the work a contract where each phase is a separate option which can be selected, and each phase of work is completed before work on the next phase starts A refurbishment which is only undertaken in phases because the building is occupied and where the contractors work on 1 floor at a time is normally considered to be only one refurbishment. Regular refurbishments These are sometimes referred to as ‘rolling refurbishments’. Problems may occur if successive refurbishments begin before each adjustment period has expired. If this happens you should either: treat the original refurbishment as ‘destroyed’ (see paragraph 9.8 ) if there is nothing left of the earlier refurbishment or this earlier work is stripped out or replaced – the effect of this is that no further adjustments would be required to the input tax on the previous refurbishment continue to make adjustments for the remainder of the adjustment period if elements of the earlier refurbishment are retained For more information on the Capital Good Scheme please see VAT Notice Capital Goods Scheme (VAT Notice 706/2) Capital Goods Scheme

Self Billing Agreements - VAT Rules, Annual Review, Reverse Charge Procedure, Record Keeping I ntroduc t ion Self-billing is an arrangement between a supplier and a customer. Both customer and supplier must be VAT registered. The customer prepares the supplier’s invoice and forwards a copy to the supplier with the payment. If you want to put a self-billing arrangement in place you do not have to tell HMRC or get approval from them. You do have to: Get your supplier or customer to agree to the arrangement Meet certain conditions If You Are The Customer Rules for Self-Billing You can set up self-billing arrangements with your suppliers as long as you can meet certain conditions, you’ll need to: enter into an agreement with each supplier review agreements with suppliers at regular intervals keep records of each of the suppliers who let you self-bill them make sure invoices contain the right information and are correctly issued Your suppliers do not have to be based just in the UK. You can self-bill businesses in other countries. You must not issue self-billed invoices to a supplier who has changed their VAT registration number until you’ve prepared a new self-billing agreement for them. If a supplier stops being registered for VAT then you can continue to self-bill them, but you cannot issue them with VAT invoices. Your self-billing arrangement with that supplier is no longer covered by the VAT regulations. Reverse C harg e Procedure There are special rules if you have a self-billing arrangement and you are involved in transactions that the reverse charge arrangement for business-to-business supplies of mobile telephones and computer chips applies to. Self-B illing Agreements You can only have a self-billing arrangement if your supplier agrees to put one in place. If you do not have an agreement with your supplier your self-billed invoices will not be valid VAT invoices – and you will not be able to reclaim the input tax shown on them. You’ll both need to sign a formal self-billing agreement . This is a legally binding document. The agreement must contain: Your supplier’s agreement that you, as the self-biller, can issue invoices on your supplier’s behalf Your supplier’s confirmation that they will not issue VAT invoices for goods or services covered by the agreement (because you’ll be issuing the invoices for them) An expiry date – usually for 12 months time but it could be the date that any business contract you have with your supplier ends Your supplier’s agreement that they’ll let you know if they stop being registered for VAT, get a new VAT registration number or transfer their business as a going concern Details of any third party you intend to outsource the self-billing process to You’ll need to set up a new agreement if your supplier transfers their business as a going concern and both you and the new business owner want to carry on with self-billing. Bear in mind that countries can set their own conditions for self-billing. So you’ll need to make sure that any agreement you draw up for a supplier in another country meets those conditio ns as well. If an HMRC officer wants to see the agreement you must show it to them. Reviewing S elf-Billing Agreements Self-billing agreements usually last for 12 months. At the end of this you’ll need to review the agreement to make sure you can prove to HMRC that your supplier agrees to accept the self-billing invoices you issue on their behalf. It’s very important that you do not self-bill a supplier when you do not have their written agreement to do so. You will not normally need to review an agreement if you provide self-billed invoices to a supplier for less than 12 months. Record keeping If you are a self-biller you’ll need to keep certain records. These are: copies of the agreements you make with your suppliers the names, addresses and VAT registration numbers of the suppliers who have agreed that you can self-bill them You’ll still be responsible for keeping these records if you outsource self-billing to a third party provider. If you do not keep the required records, then the self-billed invoices you issue will not be proper VAT invoices. Self-B illing Invoice s Once you’ve got a self-billing agreement with a supplier, you must issue self-billed invoices for all the transactions with them during the period of the agreement. As well as all the details that must go on a full VAT invoice you’ll also need to include your supplier’s: name address VAT registration number All self-billed invoices must include the statement ‘The VAT shown is your output tax due to HMRC’. Remember that you do not add any VAT to self-billed invoices that you issue to suppliers who are not VAT registered. Reclaiming Input T ax You’ll only be able to reclaim the input tax shown on self-billed invoices if you meet all the record keeping requirements. When you can reclaim the input tax depends on the date when the supply of the goods or services takes place for VAT purposes. Normally the date of supply for VAT purposes is the actual date when the goods or services are provided to you, the customer. But if you issue a self-billed invoice within 14 days of this date of supply, then the date you issue the invoice becomes the date of the transaction for VAT purposes. This determines which VAT Return you put the transaction on, and if there is a VAT rate change, it determines which VAT rate applies to the invoice. If You’re A VAT-Registered Supplier Setting Up A Self-Billi ng Arr angement If one of your customers wants to set up a self-billing arrangement with you, they’ll ask you to agree to this in writing. If you agree, they’ll give you a self-billing agreement to sign. The terms of the agreement are a matter between you and your customer, but there are certain conditions you’ll both have to meet to make sure you comply with VAT regulations. For VAT purposes you’ll have to do all of the following: sign and keep a copy of the self-billing agreement agree not to issue any sales invoices to your customer for any transaction during the period of the agreement agree to accept the self-billing invoices that your customer issues tell your customer at once if you change your VAT registration number, cancel your VAT registration, or transfer your business as a going concern Accounting For The Output Tax The VAT figure on the self-billed invoice your customer sends you is your output tax. When you have to account for this to HMRC depends on the date of supply of the goods or services for VAT purposes. This date of supply is normally the date when you actually provide the goods or services to your customer, so you might have to account for the VAT before you’ve received the self-billed invoice or been paid. You are accountable to HMRC for output tax on the supplies you make to your customer, so you should check that your customer is applying the correct rate of VAT on the invoices they send you. If there has been a VAT rate change, you will need to check that the correct rate has been used. If you’re a supplier who receives electronic self-billed invoices from a customer in another country you’ll need to make sure that: they issue the invoices in a format that’s acceptable to HMRC your accounting systems can accept the invoices Take care not to treat self-billed invoices as purchase invoices and reclaim the VAT shown as your input tax. If you do incorrectly treat the VAT as input tax you’ll have to correct the mistake. Detailed information about self-billing Find out how customers and their suppliers must treat VAT if they’re using self-billing arrangements in VAT Notice 700/62 . Self Billing and VAT

Learn and understand the HMRC rules around VAT for disclosed and undisclosed agents. Key points such as VAT tax points, invoicing and VAT accounting requirements. Agents and VAT Acting As An Agent (disclosed or Undisclosed) You’re an agent if you act for, or represent, someone else (your principal) in arranging supplies of goods or services. The supplies that you arrange are made by, or to, the principal you represent. Principals cannot avoid their liability to account for VAT on their supplies or to pay VAT on their purchases by using an agent. To act as an agent, you must have agreed with your principal to act on their behalf in relation to the particular transaction concerned. This may be a written or oral agreement, or merely inferred from the way you and your principal conduct your business affairs. Whatever form this relationship takes: it must always be clearly established between you and your principal, and you must be able to show to HMRC that you’re arranging the transactions for your principal, rather than trading on your own account you will not be the owner of any of the goods, or use any of the services which you buy or sell for your principal you will not alter the nature or value of any of the supplies made between your principal and third parties How agents are involved with VAT As an agent, you’ll usually be involved in at least 2 separate supplies at any one time, the: supplies made between your principal and the third party supply of your own services to your principal, for which you will charge a fee or commission — the normal VAT rules apply to your services as an agent It’s important to distinguish between these separate supplies. Liability of supplies The liability of the supply of your own services to your principal will not always be the same as the liability of the supply between your principal and the third parties. Selling agents If you’re a selling agent and the supply you’re arranging on behalf of your principal is taxable, your supply of services to your principal in arranging that supply is standard-rated. But, if the supply you’re arranging for your principal is exempt from VAT, your supply of services in arranging that supply may also be exempt. Buying agents If you’re a buying agent and the supply you’re arranging from the third party to your principal is taxable, your supply of services to your principal in arranging that supply is standard-rated. But, if the supply you’re arranging by the third party to your principal is exempt, your supply to your principal in arranging that supply may also be exempt. Intermediary services You may be able to zero rate the supply if you make arrangements for: the export of any goods to a place outside the UK a supply of services which is itself zero-rated as work on goods for export from the UK any supply of services which is made outside the UK Agents acting in the name of their principals As an agent, you may sometimes take a minor role in a transaction, and simply introduce your principal to potential customers or suppliers (third parties). At other times you may be more closely involved. You might: receive or deliver goods hold a stock of goods for your principal make or receive payment But, provided that the invoicing for the supply is between the principal and the customer, the only supply for VAT purposes being made by you will be the provision of your services to your principal. Invoicing Arrangements If y our principal is VAT registered, their supply to the third party is taxable and you’re registered for VAT then: Your principal must issue the VAT invoice made out to the customer and send it either direct to the customer, or through you to pass on to the customer, you only account for VAT on your supply of agent’s services to your principal If your principal is not registered for VAT but you’re VAT registered then: No VAT is due on the supply arranged by you but you must account for VAT on your supply of agent’s services to your principal, and possess evidence that you’re arranging the supply on behalf of your principal. The supply should be readily distinguishable in your records from supplies on which VAT is charged. Agents Registered for VAT who act in their own name You may sometimes be empowered by your principals to enter into contracts with a third party on their behalf. In such cases, particularly if your principal wishes to remain unnamed, you may receive and issue invoices in your own name for the supplies concerned. An agent who acts in such a capacity is usually referred to as an undisclosed agent or a commissionaire. In commercial terms, the transaction you arrange as an agent remains between your principal and the third party involved. But, you should note that these rules apply to supplies of goods and services. Goods If you issue an invoice in your own name for a supply of goods which you arrange for your principal, then for VAT purposes only, you must treat the transaction as though it was both a supply to you and a supply by you. Services If you’re an agent arranging a supply of services and both you and the supplier are registered for VAT, and the supplies are taxable, then you may treat yourself as both receiving and supplying those services. If you do this, you’ll be regarded as acting in your own name and treated for VAT purposes in the same way as an agent arranging supplies of goods. In both circumstances, you’re liable to account for VAT on the supply of the goods or the services, as well as on your own supply of services to your principal. But you may also reclaim as input tax any VAT charged on the supply made to you. As you do not alter the nature or value of your principal’s supply, the amount of input tax reclaimed will normally be equal to the output tax you account for on that supply. You must not reclaim input tax under this procedure before you have accounted for the relevant output tax. You must include the value of the supply in your VAT account and on your VAT Return as a supply both made, and received, by you. It’s important to remember that the VAT treatment of the supply you arrange does not affect your liability to account for VAT on your own supply of services to your principal. VAT Registration If you’re an agent, and the value of your taxable supplies is above a certain limit you must register for VAT. The value of your taxable supplies includes both the value of your taxable supplies to your principal and the value of any taxable supplies which you make in your own name. Invoicing Arrangements If your principal is registered for VAT, and their supply to the customer is taxable then Your principal must issue a VAT invoice to you for the actual price paid by the buyer, and you may then reclaim any VAT as input tax or use the self-billing procedure. If the customer is registered for VAT (or Not registered) you must account for output tax on the onward supply to the customer, and you must issue a VAT invoice to the customer, and you must also account for VAT on the value of your own supply of services in arranging the supply on behalf of your principal This example illustrates the accounting procedure. A VAT-registered person supplies standard-rated goods or services for £100 plus VAT to another VAT-registered person. The supplier uses an agent who acts in their own name. The agent takes a commission of 10%. The seller must issue a VAT invoice to the agent showing: Amount Goods or services £100.00 20% VAT £ 20.00 Total £120.00 The seller accounts to HMRC for £20.00 output tax. The agent may reclaim £20.00 as input tax. The agent must issue a VAT invoice to the buyer showing: Amount Goods or services £100.00 20% VAT £ 20.00 Total £120.00 The agent accounts to HMRC for £20.00 output tax. The buyer may reclaim £20.00 as input tax subject to any partial exemption considerations (read paragraph 13.1 ). The agent must also issue a VAT invoice when making a charge to the principal (the seller) for agent’s services showing: Amount 10% commission £10.00 20% VAT £ 2.00 Total £12.00 The agent accounts to HMRC for £2.00 output tax. Subject to the normal rules the seller can reclaim input tax of £2.00. In practice, the amount of money that passes between the agent and the principal in this example might only be £108.00, since the agent may deduct commission from the amount collected from the buyer, paying the balance to the principal. But, the full VAT invoicing procedure must still be followed. UK, EU and international supplies involving UK undisclosed agents F or UK undisclosed agents involved in domestic supplies If you’re a UK undisclosed agent involved in domestic supplies, the difficulties outlined in this section may not apply and there’s no intention to disturb the current commercial arrangements where you may be invoicing your principals for a separate supply of your own services, as described in paragraph 22.6 . But, if you want to, you may adopt the alternative VAT treatment set out in this section for your domestic transactions. VAT treatment of supplies involving UK undisclosed agents Introduction This section deals with the VAT treatment of international supplies of goods or services made through UK undisclosed agents. It also gives information on the option which allows UK undisclosed agents involved in domestic supplies to use this VAT treatment. Undisclosed agents take part in a supply of goods or services while acting in their own name but they’re supplying the goods or services on behalf of another. This means the third party to the transaction is often unaware of the involvement of an agent. The VAT treatment Agents involved in non-UK, non-EU or EU supplies, who bring themselves within the terms of section 47 VAT Act 1994 by acting in their own name, are treated as principals for VAT purposes and seen as taking a full part in the underlying supply of any goods or services. Consequently, as the agent is taking a full part in the supply, they’re no longer recognised as making a separate supply of their own services to their principal and the commission they retain is seen as subsumed in the value of the onward underlying supply. This treatment is for VAT purposes only. It has no impact on the legal status of agents or the way they’re treated for the purposes of other taxes or legislation. Impact of the VAT treatment (a) Goods imported into the UK, or acquired into Northern Ireland from the EU Note, for the purposes of the following illustration, the price paid by the final customer is £100, the commission retained by the agent is £20, and the money passed back to the principal is £80, all net of VAT. If you’re a UK undisclosed agent then the VAT value at importing goods on behalf of a non-UK principal importation is decided by the customs rules as previously, and will not change acquiring goods into Northern Ireland from a principal in an EU member state acquisition is £80 by virtue of section 20(3) VAT Act 1994 based on the value of the invoice raised by the UK and EU principal to you. You’re responsible for Intrastat declarations and must account for acquisition tax As a UK undisclosed agent that’s treated as a principal, you’ll be entitled to recover import or acquisition VAT in Northern Ireland, subject to the normal rules. You will then: Make an onward supply in your own name to your customer for £100 Account for any output tax due Your commission of £20 will be seen as subsumed in the value of your onward supply of the goods, and you’re no longer regarded as making a separate supply of your own services to your non-UK principal. You may treat costs incurred in the UK, such as warehousing and handling, as supplies to you and you may recover the input tax on them, subject to the normal rules. (b) International services If you’re a UK undisclosed agent involved in international services and you act in your own name under section 47(3) VAT Act 1994 , you’re treated as a principal. The services are seen as supplied to you as though you’re a principal, and supplied on by you. This means that you will be treated as taking a full part in the supply chain. As in the case of imported goods, your commission is seen as subsumed in the value of the onward supply. You’re no longer regarded as making a separate supply of your own services to your principal. Section 47(3) applies in this way in all cases where agents act in their own name in relation to international services. It applies to services being supplied both to and from the UK. Contains public sector information licensed under the Open Government Licence v3.0.

VAT liability table for Financal services type products such as loans, accountancy, banking, consultancy, commodities, advisory, share trading etc. Financial Services VAT Liability Matrix

Find out how VAT works in Italy including, VAT Registration, VAT Rates, General VAT rules, Accounting for and Paying VAT, How to Recover VAT on Expenses, VAT Returns, VAT Exemptions, VAT Grouping Rules. Introduction Value Added Tax (VAT) is a consumption tax that applies to the supply of goods and services carried out in Italy by entrepreneurs, professionals, or artists and on importations carried out by anyone. In some cases, also Intra-Community acquisitions are subject to Vat. In Italy the standard Vat rate is 22% and reduced rates are provided for several supplies of goods and services, such as 4% for listed food, drinks and agricultural products or 10% for electric power supplies for listed uses and listed drugs. Specific supplies of goods and services expressly listed in Presidential Decree n. 633/72 are exempt from Vat, for example education, insurance services, specific financial services, supply, leasing of particular immovable property. n Italy, Value Added Tax is known as IVA (Imposta sul Valore Aggiunto). As of January 1, 2026, Italy has implemented a significant structural reform with the introduction of the "Testo Unico IVA" (New Consolidated VAT Code), which simplifies decades of fragmented legislation into a single framework. 1. VAT Rates in 2026 Italy maintains four main VAT rates, though specific categories—particularly for art and collectibles—saw updates in late 2025. RateCategoryExamples 22%StandardElectronics, clothing, cars, professional services, luxury goods. 10%ReducedHotels/tourism, restaurant services, passenger transport, domestic electricity/gas. 5%Social/HealthSocial welfare services, certain medicines, and art/antiques/collectibles (as of July 2025). 4%Super-ReducedBasic groceries (bread, milk), books/newspapers (physical and digital), medical aids for the disabled. 0%Zero-RatedExports outside the EU and intra-EU B2B supplies. 2. VAT Registration Requirements Italian law distinguishes between resident and non-resident businesses. Italian Residents: There is a VAT registration threshold of €85,000. Businesses earning below this can operate under the "flat-rate scheme" (Regime Forfettario), which exempts them from charging IVA but prevents them from reclaiming input VAT. Non-Resident EU Businesses: Must register for an Italian VAT number if they store stock in Italy (e.g., using Amazon FBA) or exceed the €10,000 EU-wide distance selling threshold (unless using the OSS system). Non-EU Businesses: There is no registration threshold. Any taxable activity in Italy requires immediate registration. Fiscal Representative: Non-EU companies must appoint a local "Fiscal Representative" who is jointly liable for VAT debts. Bank Guarantee: From mid-2025, non-EU entities engaging in intra-EU trade from Italy must provide a €50,000 bank guarantee to register for the VIES system. I 1. VAT-Exempt Transactions (Art. 10 DPR 633/72)4 These activities are "in scope" for VAT but are legally exempted for social or economic reasons. Key Drawback: If your business only performs exempt activities, you generally cannot deduct input VAT on your purchases.5 CategoryTypical Exemptions HealthcareServices provided by doctors, nurses, and hospitals; diagnostic exams and specific medical treatments. EducationSchooling, university courses, and professional vocational training provided by recognized institutions. Finance & InsuranceGranting of loans, bank account management, insurance premiums, and stock brokerage. Real EstateMost residential leases and sales of "old" residential buildings (unless the seller opts for taxation). Culture & SportsServices provided by recognized non-profit cultural associations or amateur sports clubs. GamblingLotteries, betting, and authorized gaming activities. 3. Compliance and Filing The 2026 reform places a heavy emphasis on digital transparency and real-time reporting. Mandatory E-Invoicing (Fatturazione Elettronica) Italy is a pioneer in e-invoicing. All B2B and B2C invoices must be issued in a specific XML format via the government's SdI (Sistema di Interscambio) portal. Paper invoices are generally not legally valid for VAT purposes. Filing Deadlines LIPE (Periodic VAT Settlements): Submitted quarterly to summarize the VAT credit/debit position. Q1: May 31 Q2: Sept 30 Q3: Nov 30 Q4: Feb 28 (of the following year) Annual VAT Return (Dichiarazione IVA): A comprehensive summary due between February 1st and April 30th of the following year. Intrastat: Monthly or quarterly reports required for goods/services traded with other EU member states. 4. Key Mechanisms for Businesses To understand how VAT moves through the Italian system, it is helpful to visualize the "Reverse Charge" and "Split Payment" mechanisms used to prevent fraud. Reverse Charge: Used in specific sectors (like construction or electronics) and cross-border B2B transactions. The buyer, rather than the seller, accounts for the VAT. Split Payment: Primarily for businesses selling to Public Authorities. The authority pays the net amount to the business and pays the VAT directly to the Treasury. 5. Penalties for Non-Compliance Italy has some of the highest VAT penalties in the EU. Failure to file: 120% to 240% of the VAT due. New 2026 Fast-Track Assessment: The Italian Revenue Agency can now use e-invoice data to automatically assess VAT due if an annual return is omitted. If you pay within 60 days of this assessment, penalties are reduced to 40%. In Italy, VAT grouping—known as Gruppo IVA—is a regime that allows legally independent but closely linked entities to be treated as a single taxable person. With the implementation of the 2026 VAT Reform (Testo Unico IVA), the rules for VAT groups have been consolidated into the primary code, maintaining the "All-In/All-Out" principle while streamlining the digital reporting requirements. 1. The Core Benefits Irrelevance of Intra-group Transactions: Sales of goods or services between members of the same VAT group are out of scope for VAT. No VAT is charged, and no e-invoices are required between members (though internal records must be kept). Cash Flow Optimization: Instead of one company waiting for a refund while another pays the treasury, the group nets out all credits and debits, paying only the balance. Single Compliance Point: The group files one consolidated quarterly settlement (LIPE) and one Annual VAT Return. . VAT Recovery for Italian-Registered Entities If you have an Italian VAT number (direct identification, fiscal representative, or local subsidiary), you recover VAT through deduction. Mechanism: You subtract the VAT paid on your purchases (Input VAT) from the VAT collected on your sales (Output VAT) in your periodic settlements (LIPE). The "VX" Schedule: If you end the year with a credit (more Input than Output), you declare this in the VX schedule of your Annual VAT Return. Options for Credits: Carry Forward: Use the credit to offset VAT debts in the following year (most common). Horizontal Offsetting: Use the VAT credit to pay other taxes (e.g., INPS social security or IRPEF). Refund Request: Request a cash payment. Important (2026 Update): To request a refund or offset credits exceeding €30,000, you must obtain a "Visto di Conformità" (Compliance Seal) from a certified Italian accountant. Without this seal, the Agency will likely block the refund for a manual audit. 2. VAT Refunds for Non-Established EU Businesses If your company is based in the EU but has no Italian VAT registration, you use the 8th Directive procedure. How to Apply: You do not apply to Italy directly. You submit the claim through the electronic portal of your home country’s tax authority. Deadline: September 30th of the year following the expense. Thresholds: Quarterly claims: Minimum €400. Annual claims: Minimum €50. Timeline: The Italian authorities have 4 months to approve or reject the claim (extended to 8 if they request more info). 3. VAT Refunds for Non-EU Businesses Non-EU businesses (e.g., US, China) use the 13th Directive procedure. This is the most complex route. Reciprocity Required: Italy only grants refunds to non-EU countries that offer similar rights to Italian companies. This currently includes the UK, Switzerland, Norway, and Israel. The "Form IVA 79": You must submit this form in Italian or English to the Centro Operativo di Pescara. Mandatory Documents: Original paper invoices (digital copies are often rejected for non-EU entities). Proof of payment for every invoice. A "Certificate of Status" from your home tax authority. Deadline: September 30th of the following year. 4. Refundable vs. Non-Refundable Expenses Italy is notoriously strict about what qualifies for recovery. Expense CategoryRecovery Status Business Travel (Trains/Planes)100% Recoverable Hotel & Accommodation100% Recoverable (if for business) Business Meals100% Recoverable (must be documented) Cars (Purchase/Fuel/Lease)40% Recoverable (Standard "promiscuous use" rule) Entertainment/GiftsGenerally 0% (unless below €50) Mobile Phones50% Recoverable (fixed statutory limit) VAT Registration VAT Rules & Rates VAT Exemptions Paying VAT VAT Returns VAT Grouping VAT Recovery Annual Payment Advance Payment Periodic Payment Italy-VAT

Guide on General Partnerships and who is responsible for paying VAT to HMRC and how VAT recovery works. Introduction A Limited Partnership is a form of investment vehicle used mainly by companies or individuals to secure investment for projects or private equity holdings. These partnerships will contain: A General partner who is responsible for the day to day management and administration of the partnerships investments and assets and has unlimited liability for the partnerships debts and obliigations. Limited partners make investments in the partnership but do not have any responsibility for the day to day running of the firm and their liability is limited to their initial investment in the firm. Accounting For VAT The General Partner will be the individual or company that will have to register for VAT once they exceed the VAT threshold and will also be responsible for filing VAT Returns and paying VAT on behalf of the partnership. The Limited Partners will have no obligations in relation to VAT reporting. The General Partner will typically charge and invoice the Limited Partners for Management Fees for managing their investments / running the business and this will include Output VAT if they are registered for VAT. The General Partner will also incur cost in relation to managing and administering the partnership. Some of these costs will include Input VAT which the General Partnership can recover depending on their Partial Exemption Recovery Rate. -Contains public sector information licensed under the Open Government Licence v3.0. Limited Partnerships and VAT

VAT Guide - Rules on how to correct errors you discover and whether you can correct them on your VAT return or by Error Correction Notices submitted to HMRC Introduction Whilst VAT errors will occur in most businesses from time to time, it should still be a key priority of a business to ensure there are robust controls within its VAT reporting process to minimise and mitigate against such errors. Failure to do so, can result in repetitive errors and the need to submit Error Correction Notices (ECN's) to HMRC which can result in penalties and cause reputational damage to the business. Examples of such errors can range from: The amount of VAT payable or receivable being recorded incorrectly within the accounting system Incorrect amounts of output VAT paid or Input VAT recovered from HMRC on previous returns Failure to keep up to date with Legislative changes and as such incorrect VAT rates or treatments applied to transactions VAT Errors can be broken down in to two categories: Errors Made in the Current VAT Return period These are errors made and discovered within the current VAT reporting period prior to submitting the current quarters VAT return. For such errors, corrections should be made within the systems in the same period to ensure the correct VAT is reported on the VAT return sent to HMRC. Errors Discovered that Relate to Prior VAT Return Periods up to 4 Years old Errors found up to four years old from the return period of discovery can be corrected using one of the two methods detailed below depending on the value of the error. Methods for Correcting Errors Method (1) Using method 1, corrections for errors on past returns can be made on the current quarters returns provided the net value (box 1 / box 4) of the errors does not exceed : £10,000 Between £10,000 and £50,000 but does not exceed 1% of the box 6 figure on the current period return. Where errors do not meet the above conditions, then method 2 must be used. Note: Method 2 must be used where it is discovered that the error was deliberately made. Method (2) Method 2 must be used where the net value of the errors: Is between £10,000 and £50,000 but greater than 1% of the box 6 figure of the current quarters VAT returns Is greater than £50,000 Errors on previous returns were made deliberately To use method 2, a business must make an Error Correction Notice by completing the HMRC online form or in writing. See link below. How to correct VAT errors and make adjustments or claims ... Note: Businesses can use Method 2 even where the net value of errors does not exceed £10,000 or are between £10,000 and £50,000 but not greater than 1% Output VAT Output VAT will either be over declared or under declared in previous VAT returns and thus a payment will either be due or a refund from HMRC following submission of a Error Correction Notice (ECN). Input VAT Input VAT will either be over or under recovered on previous VAT returns and thus a payment will either be due or a refund due from HMRC following submission of an Error Correction Notice (ECN). Note: If an invoice was received from a supplier with VAT in a previous VAT return period but the VAT was not recovered in that period, then the input VAT will need to be recovered via Error Correction Notice and not included in the next return. Time Limits for Making The time limit for correcting errors is 4 years from the period the error was discovered. So for errors discovered in April 2022, corrections can be made for periods going back to April 2018. Adjustments That are Not Errors There are a number adjustments that are part of the normal accounting and VAT reporting process and are not errors as described above and examples are listed below: Issue of debit and credit notes Capital Good Scheme Adjustments Partial Exemption Adjustments Bad Debt Relief Adjustments Protective Claims There is also the facility for businesses to submit Protective Claims to HMRC where there is a potential over payment of Output VAT or under recovery of Input VAT but there is a risk that Error Correction Notices will not be submitted by the business on time to prevent the claims going outside the 4 year time limit cap. Protective claims will often be submitted to HMRC where: The business is still in the process of collating the information required to submit an ECN to recover VAT from HMRC. There are differences of opinion on specific treatments for VAT and the business is discussing or challenging HMRC's position. There are collective industry claims or challenges at VAT Tribunals or in the courts and the outcomes are not imminent There are ongoing competitor claims or challenges against HMRC positions in the UK courts. -Contains public sector information licensed under the Open Government Licence v3.0. VAT Errors - Guide on How to Correct VAT Errors

Privacy Policy At VATDIGITAL.COM, we respect your privacy and are committed to protecting your personal data. Our website collects visitor analytics and IP addresses solely to understand how users interact with our site and improve your experience. Any personal data you provide through enquiry emails, contact forms or via our VAT Digital AI Advisor is used exclusively to communicate with you and is never shared with third parties. Note - this website contains links to other websites relating to VAT, GST and other Taxes and as such our privacy policy does not extend to the accessing of these websites. We recommend that you review the privacy policies of any websites visited via links on our site. If you have any questions about our privacy practices or how we handle your data, please feel free to contact us at enquiries@vatdigital.com A ll information and data contained on this website is to provide a general understanding of VAT and highlight current issues relating to VAT. Under no circumstances does the information and data contained constitute professional advice and as such any reliance placed on this information or data is strictly at your own risk. Professional advice should be independently sought and no representation or any warranty either expressed or implied is given to the accuracy or completeness of the information or data contained on this website. VATDIGITAL.com Making VAT Simple Anthony Ene - Founder Legal Disclaimer

Read our Guid on GST in Jersey, Including GST rates, Exemptions, goods and services that are zero rated, the requirements around GST registration and much more. Jersey-GST Guide Goods and Services Tax (GST) - Is a consumption tax levied on certain goods and services purchased or imported into Jersey GST Registration for Businesses Trading in Jersey You can register for GST, as long as your business already has a Jersey Tax Identification Number (TIN). Use the link below to register for Jersey GST Register for GST The Standard Rate The standard rate of GST is 5% on most goods and services in Jersey. Zero-rated goods and services In Jersey, GST is rated at 0% for: Buying, selling or renting accommodation Exports The supply of international services where the benefit is received in a country outside Jersey GST exempt goods and services In Jersey, the goods and services specifically exempted from GST under the law are: Financial services Insurance Postal services Medical supplies Medicines on prescription Supplies by charities Registered child care Some burial and cremation services School fees GST Other Tips - If a business adds a service charge to your bill, then it is subject to GST. If you leave a tip, it isn't. Prescriptions - No GST is charged on prescriptions if you are entitled to claim pharmaceutical benefit under the Health Insurance (Jersey) Law 1967. House sales, rent and housebuilding - You don't pay GST on house sales, transfers or leases. Loans and mortgages are exempt from GST. Hire purchase, conditional sales or credit sales are also exempt. Businesses that charge GST GST should only be charged by a business which is registered for GST with Revenue Jersey. Jersey businesses with a turnover in excess of £300,000 in any 12 month period are required to register for GST and charge it to their customers, although some smaller businesses voluntarily register. Any overseas retailer, or online market, who sells goods to non-business consumers in Jersey and those goods are despatched from an overseas location to Jersey, must register and account for GST if their turnover from such sales exceeds, or is likely to exceed, £300,000 per annum. Smaller overseas retailers may also voluntarily register. Overseas retailers include sellers who supply goods in response to orders taken on their website, a third party website or through catalogue or similar sales. This only applies to goods and not digital services. Overseas retailers may also opt to register for GST even if you don't reach the threshold. What Must be Included on an Invoices Issued by GST Registered Businesses GST registered businesses must also normally include, on all invoices: Details of their address and GST number The name of the customer, together with a description of the goods and / or services provided The total cost and the GST charged However, retailers (i.e. those making the majority of their sales to the general public) can provide simplified invoices, unless you request a full GST invoice. For more specific information regarding Jersey VAT, please visit the Jersey Tax Authority website Goods and Services Tax (GST). Source - gov.je