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VAT Risk - Identifying VAT risk areas in an organisation, controls and how to mitigate against VAT errors and Introduction VAT Risk - Failure to introduce and continually develop robust controls in relation to VAT within the E2E processes in an organisation and can result in: The over-payment of VAT to HMRC Under recovery of VAT From HMRC Fraud HMRC Penalties and Fines Reputational Damage with HMRC Increase in VAT P&L Cost VAT Risk Areas Client On-boarding Risks (know your Client Failure to document and verify a client's residence or their businesses country of operation resulting in incorrect VAT determination within billing systems and thus incorrect VAT applied on invoices. Potential fines and penalties from HMRC. Failure to obtain and verify a clients VAT registration number or determine if they are in business resulting in incorrect billing for VAT and potentially aiding fraud. Potential fines and penalties from HMRC. Note - Issues such as above can usually be identified during HMRC audits where samples of client details are requested along with their country of residence or operation which HMRC will then test against VAT applied to their Invoices. Supplier On-boarding Risks Failure to obtain and verify a suppliers VAT registration details and number, potentially resulting in the invalid recovery of input VAT Failure to obtain and verify a suppliers VAT registration details and number resulting in carousel fraud where fraudulent suppliers do not pay the VAT to HMRC. Note: Domestic reverse charging in some industries like Telecoms (mobile phones etc) and the construction industry were introduced to combat this problem. Accounts Payable Risks Invalid VAT Invoices - Failure to review and validate supplier invoices to ensure they are compliant from a HMRC perspective and thus risking recovering VAT on invoices that are invalid resulting in HMRC claw-back and penalties Poorly Trained Staff - Staff with little or no understanding of VAT can result in incorrect coding of invoices for VAT and potential under or over recovery of VAT. Mistakes caused by incorrect coding will result in repeated Error Correction Notices (ECN's) having to be raised and submitted to HMRC which will attract penalties and damage the organisations reputation with HMRC Failure to Reverse Charge Non UK Supplier Invoices for Services - Invoices received from non UK suppliers for services in the majority of cases (exceptions hotels, admissions to events, overseas property transactions, non UK transport) are required to be reverse charge and thus the organisation will be required to self account for output VAT to HMRC. This is a common problem. Failure to Reverse Charge UK Supplier Invoices Subject to the Domestic Reverse Charge Rules - Supplier invoices in certain industries are subject to the domestic reverse charge where the customer is responsible for accounting for the output VAT to HMRC. This is normally the case in the construction industry, wholesale electricity and gas sales, mobile phone and computer chip industry. Processing Invoices Issued in a Foreign Currency where the VAT is not Translated to GBP - Supplier invoices issued in the UK in a foreign currency are required to display the VAT amount in GBP along with the exchange rate used. Invoices where the VAT is not translated into GBP should not be processed as they are invalid from a HMRC perspective. Application of Reverse Charge to Goods that have been Imported to the UK - Where goods have been imported into the UK and import VAT has been levied at the border or via the Postponed VAT Accounting (PIVA) procedure (where VAT is paid and recovered via the VAT return), there is no need to account for reverse charge VAT again. Procedures should be in place in Accounts Payable to identify and distinguish between invoices for goods and those for services to avoid such mistakes and potential VAT errors. Input VAT Directly Attributable to Onward Supplies to Clients - Input VAT that is directly incurred (linked) to onward supplies to clients such as legal fees will often be recharged to the clients during billing. Where the underlying deal is a taxable supply in the UK or the supply is to a non UK counter-party then the associated VAT on such third party cost can usually be recovered in Full from HMRC . If the underlying deal is a Financial Service provided to a UK counter-party and is Exempt from VAT, then the input VAT on such cost (legal fees etc) would normally be fully irrecoverable . If an organisation does not have a process in place to identify and apply the correct VAT recovery to these costs then this can result in the under or over recovery of VAT from HMRC. Third Party Costs Incurred - Input VAT can only be claimed by the recipient company as addressed on the supplier invoice. Therefore where a company pays for goods or services on behalf of a client or customer for example and the invoice is addressed to the client, then the company has no right to recover any input VAT shown on the invoice. (Even though it paid for the services). Hence VAT recovery should be blocked in such cases. Payments made Outside of the Accounts Payable System - Whereas the majority of payments made to suppliers by an organisation will usually be processed by its main accounts payable team, there can be instances where payments are made by functions directly to suppliers and thus the usual checks and application of VAT may be bypassed unintentionally. For example this can occur where front office functions pay for trading type costs direct or where self billing invoices are processed outside of the accounts payable function. The best way to monitor and mitigate against such risks is for tax teams to have regular catch-ups and with Finance, Front Office, Accounts Payable, Sourcing and other teams to identify such processes early. Accounts Receivable (Billing) Risks Manual Billing Processes - Where customer invoicing is carried out via manual billing processes such as using MS Word or Excel, errors can occur where the VAT liability determination is not automated leaving staff to apply the correct VAT treatment. If staff are inadequately trained in relation to VAT, then this can result in the issue of incorrect invoices . Applying VAT to Inter- Company Invoices issued within a VAT Group - Companies within a VAT Group benefit from VAT free invoicing among group members and as such its imperative that there are controls in place to ensure VAT is not added to inter VAT group invoices resulting in additional costs for the recipient entity. Not Applying VAT to Intercompany Invoices Issued to Non VAT Group Members - Whilst VAT will not normally be applicable to invoices issued to other entities within the VAT group, output VAT should always be applied to standard rated supplies on inter-company invoices where the UK recipient entity is not a member of the VAT Group that the issuing entity belongs to. Incorrect Static Data - It is common for billing systems to be fed with client data from static data systems to enable them to populate invoices with the name and address of clients, their VAT registration number and in some cases determine the correct rate of VAT to apply on invoices. Where the static data held for clients is incorrect or not up to date, then this will inevitably result in invoices being issued with incorrect data and rates of VAT. Inadequately Trained Staff - the application of VAT is based on a number of factors such as product type, type of customer (business / non business), customer residence / country of operation etc. If billing staff have a limited understanding of the application of VAT, then errors can occur during customer billing. Intervention and its Impact on Billing - A company may provide services to a non UK counter-party but its local branch may actually be heavily involved in providing the service. Where this occurs, some countries (France for example) may have rules in place that state that local VAT should be applied to the transaction. In such cases, even though the invoices are raised from the UK to the overseas customer, local VAT (French for example) should be applied to the invoice to ensure it complies with local VAT rules. VAT Accounting Risks Failure to Reconcile VAT Accounts - Accounting for and posting VAT correctly within the financial accounting system should always be followed up by preparing a monthly reconciliation of the output VAT, input VAT and VAT control accounts to ensure all balances are fully supported by detailed and itemised lists showing what is items and actions are required to clear the balances. For example, the output VAT balance may contain VAT payable to HMRC next month or quarter, the input VAT balances may contain VAT recoverable amounts still pending for payment from HMRC. Or both input and output VAT balances may contain amounts to be swept to the VAT control account for balancing with payments to and from HMRC. Failure to carryout reconciliations regularly can result in significant uncleared balances being built up that are not fully understood or explainable by accounting staff and can result in errors going undetected. This can also cause delays and the need to employ costly consultants to rectify when such issues are detected during annual external or internal audits. Failure to Book The VAT on Invoices Issued - There can be instances where invoices are issued and sent to customers but the VAT is not correctly booked to the output VAT account or worse booked to a revenue account which is contrary to the VAT accounting standard. This will result in the incorrect reporting of VAT to HMRC and possible penalties when the errors are detected. Note such errors can be detected by HMRC when a customer includes an issued invoice within their VAT return to recover the VAT incurred. In such cases the errors will be categorised as careless by HMRC and result in severe penalties. Sourcing / Procurement Risks Procurement for Major Contracts - There should always be a policy within an organisation for procurement teams to engage with both Legal and Tax teams prior to entering into contracts for the purchase of goods or services. It is important that such contracts are efficient for VAT in terms of ensuring that the organisation does not incur unnecessary VAT costs. A common example of this is where a firm enters into a contract with a supplier to provide global services to its organisation without considering how the contract should be formulated to ensure that local business contract for supplies directly. Also where the UK head office is the main party to the contract and the supplier bills the UK, reverse charge VAT will be a significant cost which may not be fully recoverable. VAT on such contracts will often not be budgeted for creating large unexpected costs during the yea and impacting the P&L account. Also VAT registered companies importing goods should always ensure that they actually own the goods they are importing as import VAT is only recoverable where the goods are owned by the VAT registered entity. Purchase of Goods from Overseas The importation of Goods from overseas will result in input VAT (20%) being levied at the boarder and paid to HMRC or included on the VAT return to pay and recover the VAT from HMRC under the Postponed Import VAT Accounting (PIVA) process. Input VAT is only recoverable by the owner of the goods and as such the legal owners of the goods should ensure that they are the importer of record and own the goods at the time of importation to ensure they can successfully recover the VAT paid to HMRC. New System Implementation VAT Determination - The introduction of new billing or accounts payable systems in an organisation will require close liaison with a VAT specialist or team to ensure the systems are correctly configured for VAT and more specifically to determine the correct VAT liability to apply to transactions. Regular and continuous engagement here between IT, Finance and Tax teams is critical during the build or implementation process to ensure VAT is correctly set up within the system and to avoid costly reconfiguration. Making Tax Digital Requirement - All VAT registered businesses are required by HMRC to be MTD compliant by ensuring that their billing, AP and accounting systems are digitally linked (E2E) right up to filling their VAT return to HMRC via e-filler (API link). Failure to do this will result in HMRC penalties and possible reputational damage. Automation - Although automating processes within the VAT compliance area can result in significant benefits in terms of time saving, accuracy and data quality, it can also result in over engineering and create risks if the audit trail is lost and processes are subsequently changed. It is therefore important that a complete integrity review of the existing processes is carried out prior to automation. VAT Report Design and Parameters VAT Reports Used for VAT Reporting - The design of reports that are extracted from systems to provide data for VAT reports is critical as getting this wrong can lead to significant errors within the VAT return that can continue for years leading to over paid or under recovered VAT. All reports designed for VAT reporting should go through extensive testing, review and documentation prior to deployment to avoid future errors, losses in the P&L and reputational damage. Ongoing Annual Review of VAT Report Content & Parameters - To ensure the continued accuracy of data contained in reports used for VAT reporting, it is essential that VAT report parameters and content are up to date and continue to capture all the required information including impacts of changes in tax authority rules and Government legislation. Key Man Risk Over Reliance on Key Individuals - Over reliance on individuals to manage specific processes in Finance or Tax brings with it the risk that key knowledge can simply evaporate if and when these individuals suddenly leave the business due to redundancy, illness, or simply move on to new role. Organisations can then be left exposed to VAT risks due to the inability of existing staff to complete and file correct VAT returns. Larger organisations with more complex operations may be forced to hire expensive contractors to plug the gap. To prevent this, organisations need to ensure they have robust and up to date process notes which include diagrams to illustrate key parts of processes. Rotation of staff or work sharing can mitigate against such risks becoming embedded. Changes in Business Structure Partial Exemption Special Method - PESM's are designed and agreed with HMRC to ensure there is a fair and transparent allocation of input VAT to different areas of the organisation and to ensure VAT is recovered in line with a prescribed recovery method. To ensure PESM's are up to date it is essential that tax teams hold regular and annual meetings with both revenue generating product departments and accounts payable to ensure that any changes to the business structure or new products on boarded can be reviewed and the PESM amended and re agreed with HMRC. Failure to do this will result in incorrect input VAT allocation and recovery and can be costly in terms of the P&L hit when VAT has been over-recovered and a repayment is required to HMRC. Fixed Establishment Branches and Fixed Establishment - Where UK companies set up branches overseas for example in EU countries, they need to be aware of local rules sometimes driven by case law such as Skandia and Danskie Bank (see UK news page) which can impact the VAT liability of recharges between branches and their head office and visa versa. Also where UK companies have subsidiaries overseas and those subsidiaries have UK branches that are a member of the head offices UK VAT Group, care must be taken to ensure those branches meet the criteria of having a fixed establishment in the UK. That is, they are resourced with sufficient human and technical resources and are actually providing services in the UK. Branches that are merely "brass plates" where they have few or no employees or infrastructure and have no major trading activity and are mainly conduits of overseas recharged cost, may fall foul of HMRC fixed establishment and VAT grouping rules. HMRC can de-group such branches. Services Provided to Staff via Salary Sacrifice Benefits Provided to Staff via Salary Deduction - Benefits such as car parking, bikes for work where the cost is deducted from an employees salary are vatable and Standard Rated VAT at 20% is due to HMRC on such cost. As these are not normally processed via the accounts payable team and are employee expense or payroll related, there is the risk that they will not be included in the VAT return process and overtime a significant VAT liability can build up which will eventually have to be declared to HMRC via an Error Correction Notice. As a result HMRC can impose penalties and may lead to reputational damage. VAT Risk and Control Framework Risk Documentation, Controls and Testing - To avoid and mitigate against many of the possible errors identified above, it is essential for organisations large and small to ensure that they have an internal VAT Risk and Control Framework that sets out all the potential risk that can affect the accuracy of the organisations VAT return. This will involve preparing a schedule of all the potential risks, the controls required to mitigate against these risk, who is responsible for operating each control, who has overall accountability for signing off that the controls are in place, documented and are operating correctly and finally what testing is required and the frequency. HMRC - have also recently published guides on VAT compliance and what they expect from businesses in terms of controls and the required testing of these controls to ensure VAT reporting is accurate and compliant. See links below. Help with VAT compliance controls — Guidelines for ... Help ensuring documents filed with HMRC are correct and ... Senior Accounting Officer Requirements Annual Senior Accounting Officer Compliance - Schedule 46 of the Finance Act 2009 contains the Senior Accounting Officer (SAO) provisions. These provisions apply to larger qualifying companies and require them to appoint a Senior Accounting Officer (SAO) to represent the company in confirming annually via a certificate in which they must state whether the company had appropriate tax accounting arrangements. If the company did not have appropriate tax accounting arrangements they must also explain what the shortcomings were. Penalties can be applied by HMRC in the event that: It fails to notify the name of its SAO, or If they fail to meet their main duty (though an SAO may escape a penalty if they have made reasonable efforts to rectify shortcomings), or If they fail to give HMRC a certificate within the required timescale, or they provide a timely certificate that contains a careless or deliberate inaccuracy. It is therefore even more paramount for larger companies to ensure that their risk and control environment is robust and they have adequate controls and updated process notes, flow diagrams and other documentation in place. For more information in relation to the SAO process, please see the link below to HMRC guidance in this area. Senior Accounting Officer Guidance - HMRC internal manual HMRC - Business Risk Review The Business Risk Review (BRR+) is the process by which we evaluate and discuss with the customer where we think they sit on the compliance spectrum and in particular whether they meet the criteria for Low Risk. It is based on the principle that, while factors such as the size and complexity of a business create their own risks and can make it more challenging for customers to comply with their tax obligations, even the largest and most complex businesses can be classified as Low Risk if they mitigate these risks to an acceptable level through their behaviours. The results of the BRR+ inform both our overall approach to a customer and the focus of any future Risk Assessment activity. The BRR+ will take place at least annually for customers who are not Low Risk. For Low Risk customers a BRR+ will, in general, be carried out on a three year cycle. The BRR+ process involves the following steps: Considering the landscape in which the business operates, and it’s potential impact on the inherent level of tax compliance risk the customer presents For each applicable tax regime, considering the effect of the customer’s behaviour on this inherent risk - does their relationship with HMRC, their Systems and Processes, Internal Governance and their Approach to Tax Compliance tend to increase or decrease this inherent risk Considering the overall risk rating of the business Agreeing the customer’s overall risk status Agreeing any action required to reduce the level of risk Open Government Licence v3.0 VAT Risk

The sale of a business can trigger a VAT liability or can be treated as a Transfer of a Business as a Going Concern (TOGC) (zero VAT) provided HMRC conditions are met. Introduction The sale of assets of a business by a business that is VAT registered would normally attract 20% VAT. However under HMRC rules, if you sell assets of a business as a going concern, then provided certain conditions are met, no VAT is applicable on the sale. This is known as Transferring a Business as a Going Concern (TOGC) and the following conditions must be met before the transfer can be treated as a TOGC. The assets, such as stock-in-trade, machinery, goodwill, premises, and fixtures and fittings, must be sold as part of the TOGC. The buyer must intend to use the assets in carrying on the same kind of business as the seller - this does not need to be identical to that of the seller, but the buyer must be in possession of a business rather than simply a set of assets Where the seller is a taxable person, the buyer must be a taxable person already or become one as the result of the transfer In respect of land or buildings which would be standard-rated if it were supplied, the buyer must notify HMRC that they have opted to tax the land by the relevant date, and must notify the seller that their option has not been disapplied by the same date Where only part of the business is sold it must be capable of operating separately There must not be a series of immediately consecutive transfers of the business Activities that are not consid ered a TOGC The buyer does not: (1) continue the business and absorbs the assets itself (2) intend to use the assets to continue the same kind of business as the seller The buyer is not registered for VAT or required to register as a result of the transfer There is no supply made, which could include situations such as changes in the constitution of a partnership There has been no transfer of assets so there is nothing to which the TOGC provisions can apply instances where a limited company is passed from one person to another via the transfer of shares, but the assets still belong to the limited company - there is no change in the ownership of the assets so no supplies to which the TOGC provisions could apply Where a VAT-registered farmer transfers his business as a going concern to a farmer who is certified under the Agricultural Flat Rate Scheme there can be no TOGC for VAT as the buyer is not registered or registerable for VAT Note : The sale of shares in a company is exempt from VAT as it falls under the Financial Services Exemption. Any VAT incurred on associated selling costs such as Legal, Accountancy, Consultancy etc, may be irrecoverable as a result. Note : The TOGC rules are compulsory. You cannot choose to ‘opt out’. So, it’s very important that you establish from the outset whether the business is being sold as a TOGC. Incorrect treatment could result in corrective action by HMRC which may attract a penalty and interest. For more specific details of how to treat the transfer of assets and or a business as a TOGC, please refer to HMRC's Notice on this subject in the link below. Transfer a business as a going concern (VAT Notice 700/9) -Contains public sector information licensed under the Open Government Licence v3.0. Selling a Business and VAT

Find out how VAT works in German including VAT Rates, VAT Rules, VAT Registration, Exemptions and much more. VAT - Norway German-VAT- Guide on how VAT applies in Germany Most goods and services in Germany are taxed at the standard rate of VAT which is 19%. There are two rates of VAT in Germany: Standard Rate 19% Reduced Rate 7% Reduced Rate The reduced rate of VAT (7%) is applicable to goods and services such as: Hotel Accommodation Museums Theatres Exempt Goods and Services Medical Services Insurance Property Sales Charging VAT Customer located in: In German - 19% or 7% B2B customer outside EU - 0% B2B customer in EU - 0% (Reverse Charge Invoice B2C (to private individual) Less than 10,000 Euros - 19% VAT B2C (to private individual) Greater than 10,000 Euros - VAT rate applicable in customers country. German business must either register in customers country or use the One Stop Shop Process. Broadcasting, Telecommunications, Electronically Supplied Services - Place of supply where customer located and as such apply VAT rate in customers country. Input VAT Recovery Input VAT is deducted from output VAT to arrive at the net VAT payable on the VAT return E - Invoicing Guide - German Ministry of Finance E-Invoicing

Commodities and VAT - Guide on the different types of commodities, the rules and applicable VAT Law and how VAT is applied to the various types of commodities. Introduction The Trading of commodities is a major element of the worlds financial system in that many institutions and investors use such trading as a me ans of speculating to generate wealth or hedge against adverse price movements in other investments they hold. Commodities can be traded by Banks, Commodity Houses, Brokerages etc. Commodities are often traded locally in individual countries or on exchanges in terminal markets located in major Financial Centres in the US, Asia and Europe. In the UK, there are a number Terminal Markets which are governed by the Terminal Markets Order (1973): London Bullion Market Association London Metals Exchange London Platinum and Palladium Market International Petroleum Exchange London The London Cocoa Terminal Market The London Coffee Terminal Market The London Meat Futures Market The London Potato Futures Market The London Soya Bean Meal Futures Market The London Sugar Terminal Market The London Vegetable Oil Terminal Market The London Wool Terminal Market The London Grain Futures Market The Liverpool Barley Futures Market Terminal Markets Order The Terminal Markets Order (TMO) was originally published in 1973 and its aim was to remove the administrative burden of VAT and enhance competitiveness in the UK markets by allowing certain Commodity Derivative transactions between Terminal Market members and non members to be Zero Rated. Note: The Terminal Market Order applies specifically to commodity derivatives (Futures, Options, Spots, Forwards) where the underlying asset is a physical commodity such as Grain, Oil, Investment Gold, Pork bellies, Platinum etc. The Terminal Markets Order (TMO) does not cover Financial Derivatives based on currencies, interest Rates, Shares, Bonds, indices etc. These are covered under the Banking Section. (Click on Banking Button on home page for infomation) Products That Benefit From Zero Rating Futures Contracts Commodity Futures are standardised derivatives contracts offered by and traded on commodity exchanges by Investment banks, Commodity Houses, Brokerages (as Exchange Members) and allow investors to: Speculate on the price movement of an underlying commodity such as (Wheat, Coffee, Oil, Natural Gas, Silver) Hedge against the movement of the price of a commodity. ( Mainly large companies and investors that use the future contact as a hedge against to protect their own financial instruments ) Buying or selling a Futures Contract means that the buyer and seller are obligated to buy and sell an agreed quantity of a commodity at an agreed price and take delivery of and transfer the underlying commodity respectively on the expiry date of the contract. Delivery normally occurs when instruction is given to remove the goods from the warehouse. Commodity Futures contacts can either be cash settled (most) where there is no delivery of the underlying commodity and contracts are closed out prior to expiry via the settlement of cash or non cash settled meaning that the commodity is actually delivered at expiry. So if potatoes were the underlying commodities, they would be transferred to the buyer. Commodity Futures benefit from Zero Rating where: They are traded on one of the Terminal Markets listed above Futures transactions are between members of the terminal markets (even where delivery occurs) Futures Transactions are between a member and a non member of the Terminal Market and there is no delivery of the commodity. An agent or broker (who is a market member) between a member and member or non member Note : Where delivery occurs between a member and non member of a Terminal Market, the VAT liability will be based on the underlying product. So for example if the product was Investment Gold, the transaction would be Exempt rather than Zero Rated when the Gold has been delivered. Note: Futures Contracts can also be agreed and bought off exchange (over the counter) OTC . These contracts will not attract Zero Rating (unless the commodity is delivered and specifically zero rated). Where Futures are bought OTC, the VAT liability follows the liability of the commodity being traded. Forward Contracts Commodity Forward Contracts are similar to futures contracts in that they oblige a buyer or seller to buy or sell a given amount of a commodity at a set price on a specified date. The difference between Forwards and Futures is that the contracts are non standardised and traded OTC and do not attract Zero Rating unless the commodity being traded is zero rated. Similar to Futures traded OTC, the VAT liability will follow the liability of the underlying commodity being traded. Option Contracts Option contracts provide the right to either buy or sell an underlying commodity at an agreed price (strike price) on a given date. There is no obligation to buy or sell the underlying commodity and the holder can simply let the option: Expire Close out the option (buy or sell before expiry) Exercise the option and sell or purchase the underlying commodity Regardless of whether an option holder chooses any of the above options, they will have to pay a premium for the right to buy the option. The grant of an option contract is a Zero Rated supply if they are traded on any of the above earlier mentioned Terminal Markets irrespective of whether the transaction is between two market members or a market member and a non market member. The option contract will also remain Zero Rated if it is exercised. However if the option is exercised there will be an additional supply of the underlying commodity. Actuals Contracts Actuals are contracts where the parties agree to the delivery of a commodity for a specific amount and price on a specific date. This can be in the future (futures) or on the spot (Spots) These contracts are Zero Rated where they are traded by two market members on a Terminal Market as listed above. Investment Gold Investment Gold is either: Gold of a purity not less than 995 thousandths that is in the form of a bar, or a wafer, of a weight accepted by the bullion markets A gold coin minted after 1800 that is: (a) of a purity of not less than 900 thousandths (b) or has been, legal tender in its country of origin (c) of a description of coin that is normally sold at a price that does not exceed 180 per cent of the open market value of the gold contained in the coin An investment gold coin as specified in Investment gold coins (VAT Notice 701/21A) . Supplies of Investment Gold between two taxable persons who are members of the London Bullion Market Association (LBMA) are Zero Rated . This includes: Futures Contracts Option Contracts Investment Gold that is not traded between members of the LBMA is covered under the VAT Exemption and the supply of Investment Gold here is exempt including for Financial Derivatives (Futures, Forwards, Swaps) excluding options. Note: Suppliers of Investment Gold can also apply to Opt to Tax and thus charge 20% Standard Rated VAT on their supply which allows them to recover VAT on their purchases. See HMRC VAT Notice 701/21: gold Voluntary Carbon Credits From 1 September 2024 VAT needs to be accounted for on certain trades of voluntary carbon credits at the standard rate. The following activities are still outside the scope of VAT: the first issue of a voluntary carbon credit by a public authority the holding of voluntary carbon credits as an investment, where there is no economic activity donations made to voluntary carbon credit projects sales of voluntary carbon credits from self-assessed projects with no independent or third-party verification Voluntary carbon credits in the scope of the Terminal Markets Order The Terminal Markets Order provides a VAT zero rate for wholesale commodity transactions made by members on specified terminal markets. From 1 September 2024, HMRC will allow the VAT relief granted under the Terminal Markets Order to apply to contracts in taxable voluntary carbon credits traded on terminal markets, within the terms of the relief. Electricity and Gas Trading Banks involved in Investment or Wholesale banking often trade in Natural Gas and Electricity via trading contracts for the purchase and supply (delivery) of wholesale gas and electricity. Such supplies are normally subject to the Domestic Reverse Charge Procedure. What this means is that the supply of Gas and Electricity will effectively be Zero Rated for the bank supplying as the liability for accounting for the Output VAT will be passed on to the customer. Only the net sales amounts will appear on their VAT return in Box 6. The opposite will be the case where the bank purchases Gas or Electricity and has to self account for VAT under the reverse charge mechanism thus effectively paying 20% VAT to HMRC and at the same time recovering 20% VAT from HMRC meaning a nil payment in Box 5 to HMRC. Note: This should not be confused with the supply of gas to businesses plus 20% VAT and the supply of domestic Gas and Electricity which is charged at the reduced rate 5% by energy companies. Emission Allowances UKETS (Replaces EU scheme) Emissions trading schemes usually work on the ‘cap and trade’ principle, where a cap is set on the total amount of certain greenhouse gases that can be emitted by sectors covered by the scheme. This limits the total amount of carbon that can be emitted and, as it decreases over time, will make a significant contribution to how we meet our Net Zero 2050 target and other legally binding carbon reduction commitments. Within this cap, participants receive free allowances and/or buy emission allowances at auction or on the secondary market which they can trade with other participants as needed. From the 1 May 2021 domestic Reverse charge VAT applies to the trading of UKETS - Emission Trading Certificates similar to Electricity and Gas Trading above. Oil Trading The supply of oil for non domestic purposes is Standard Rated including Crude oil, Kerosene, Road Fuel, White Diesel among others. Oil traded as commodity futures are covered above under futures. Fiscal Warehousing A fiscal warehouse is a regime where certain commodities in free circulation within Great Britain or between Northern Ireland and the EU can be traded VAT-free , subject to the certain conditions. Goods are in free circulation if they’re produced in the EU or, in the case of imported goods, all duties, taxes and levies due at importation have been paid. How Fiscal warehousing works Fiscal warehousing is a regime under which certain specified commodities may be placed in a notified warehouse and traded by businesses. VAT on the supplies of commodities both entering a fiscal warehouse and made whilst within the warehouse is relieved and accounted for when the commodities are removed from the regime. Goods must be in free circulation for this to happen. Eligible Commodities There are many types of commodities that can be placed in a fiscal warehouse and are eligible to be traded and transferred between fiscal warehouses in Great Britain or between Northern Ireland and the EU. Some of these are listed below (list is not exhaustive): Copper Zinc Nickel Aluminum Lead Oil Cerials Platinum Palladium Coffee (unroasted) Potatoes Eligibility Criteria The eligibility criteria is: Commodity in question should be commonly traded in large quantities on a recognised international market All commodities entered into the fiscal warehouse must be in free circulation Trading within and Removal of Goods from the Warehouse Supplies of goods which are in a fiscal warehouse are outside the scope of UK VAT. There is no requirement to account for VAT to HMRC on such transactions, nor is there any direct customs control over movements or transfers of goods whilst within the fiscal warehouse regime. When goods are removed from the regime the amount of VAT payable will correspond to either the amount which would have been due on the: Transaction that caused the goods to be entered into the warehouse Value of the last supply if they have been sold within the warehouse VAT becomes due when commodities finally leave the fiscal warehousing regime. The amount of VAT due corresponds to the amount of tax which would otherwise have been due on the final supply of goods in the warehouse, plus the amount of tax which would have been applied to any of the relieved supplies of services relating to those goods affected after that final supply. The person liable to pay the VAT on removal is the person who causes the goods to cease to be covered by the regime, if you are: VAT registered, you should account for the VAT on your VAT Return covering the period of the removal Not registered, you must complete form VAT150 Advice of removals from fiscal warehouse by persons unregistered for VAT and present it to the local EPU even when no VAT is due on removal Payment of any VAT due on removal must be made in cash or by cheque. For all removals, proof of ownership and either a stamped copy of form VAT150 or a VAT registration number is required by the warehouse keeper before the goods can be released Where goods are acquired into Northern Ireland from an EU member state and subsequently removed from warehouse without being sold within the warehouse, acquisition VAT must be accounted for in the normal way as explained in VAT Notice 725: VAT on movements of goods between Northern Ireland and the EU . When is VAT not due on Removal of Goods If you remove your goods from a fiscal warehouse in any of the following situations, VAT is not due on the removal of the goods. Removal of zero-rated goods that have not been subject to relieved supplies of services whilst warehoused Removal of your own goods (that either you produced or purchased VAT paid) which you entered to the fiscal warehouse and that have not been sold, nor have they been subject to relieved supplies of services whilst warehoused Exports where goods are exported from Great Britain outside the UK or from Northern Ireland to Great Britain and outside the EU, standard export procedures apply. Such removals must be supported by normal evidence of export. Any associated relieved supplies of services do not become taxable where goods have been exported. Dispatches to EU member states from Northern Ireland where goods are removed in the course of an intra-EU supply, normal Intrastat and intra-EU supply or acquisition rules apply for VAT-registered traders. Relieved services are not taxed on removal to an EU member state but should be reflected in the value of the supply. Temporary removals - authorisations (either general or specific) must be obtained through the approving office. Goods must be returned to the original site or another covered by the authorisation. In order to obtain authorisation, the remover must state the length of time the goods will need to be removed for and for what purpose the removal is required. Such removals must be notified to the warehouse keeper who’s responsible for ensuring that any temporary removals meet the prescribed conditions. VAT-free sampling small quantities of commodities of a negligible commercial value can be removed for this purpose under a simplified removal scheme. The amount and approximate value of the commodity to be removed must be detailed in the authorisation given by the VAT helpline. Such removals must be notified to the warehouse keeper, who’s responsible for ensuring that they meet the prescribed conditions. VAT Treatment for Services in a Fiscal Warehouse Services which may be zero-rated are supplies of allowable physical services within the fiscal warehouse which would otherwise be taxable at the standard rate, for example storage charges. Services which may not be zero-rated are brokerage, agents fees and transport between warehouses. On removal of the goods from the warehouse, any VAT relieved on each supply of services relating to those commodities made after the last sale in warehouse of such commodities must be accounted for, together with the VAT due on the relieved supply of the commodities. For example the commodity may be divided up into smaller packages by a simple operation that does not change its nature. The value of the service that is performed whilst the commodity is still relieved from VAT in the warehouse, must be added to the value of the supply when it is finally sold and removed from the warehouse. For example: Value of re-packaging service £50 Value of final supply of commodity on removal from warehouse £100 Value of total final supply £150 VAT due on total final supply £150 × 20% = £30 Where, as a result of an operation carried out on eligible commodities, the resulting commodities are no longer eligible for fiscal warehousing, they’re treated as having been removed and VAT will become due. VAT R egistration If your only business activity is the supply of goods within a fiscal warehousing regime you have no liability to register for VAT, but you may do so voluntarily if you wish under VAT Act 1994 Schedule 1(10). Your liability to register for other business activities is not affected by either the value of supplies made in a fiscal warehouse or the value of deemed supplies of relieved services accounted for by the remover of the goods. Commodities and VAT - Guide on how VAT is Applied

Discover the different VAT accounting methods organisations use to account for VAT in the P&L and Balance Sheet including the Gross or Net Method. Introduction Accounting for VAT can be broken down into two categories: Accounting for VAT on Sales or Revenue Accounting for VAT on Purchases Accounting for VAT on Revenue VAT registered business providing taxable supplies of goods or services will include VAT (20%) on their invoices. The accounting entries required for this transaction will depend on whether VAT is accounted for when the invoice is raised and sent to the customer or when the customer pays for the goods and services. Where VAT is accounted for or booked to the sales ledger when an invoice is raised and sent out, the normal VAT accounting entries will be as follows: DR Debtors account (customer) on Balance Sheet CR VAT Payable account (creditors) to HMRC on Balance Sheet The above entries will record the VAT owed by the customer to the business issuing the invoice and also the VAT owed to HMRC by the business issuing the invoice. When the customer settles the invoice, the closing VAT entries will normally be as follows: DR Bank account on Balance Sheet CR Debtors account (customer) on Balance Sheet The above entry records the VAT received from the customer paid into the bank account of the business and also the clearance of the VAT debtor on Balance Sheet customer account. The final entry will be the payment of VAT collected from the customer to HMRC and will be booked as follows to the ledgers: DR VAT Payable (creditors) to HMRC account on Balance Sheet CR Bank account on Balance Sheet Where VAT is accounted for or booked to the ledgers when cash is paid to the business (cash accounting) the normal accounting entries will be as follows: DR Bank account on Balance Sheet CR VAT Payable (to HMRC) account There are no debtor accounts under the cash accounting method as VAT is only accounted for once the cash has been received from the customer. The final leg of the transaction will be the payment to HMRC for the VAT collected from the customer and the VAT accounting entries will be as follows: DR VAT Payable (to HMRC) account CR Bank account The above clears the VAT payable account to zero. Accounting for VAT on Purchases VAT (Input VAT) will be incurred on taxable purchases made by a business. This will include purchased of materials, electricity, legal and accountancy services, software, hardware such as computers and other peripherals, Assets such as motor vehicles, plant and machinery etc. There are two accounting methods used to record VAT incurred on purchases, namely: Gross Method Net Method Gross Method Using the gross method of accounting for input VAT incurred on purchases means posting the full cost of the item(s) purchased to the expense line of the P&L (So the net value on the invoice plus the VAT will be posted). So an invoice for £10,000 + £2,000 VAT will be posted gross to the expense line in the P&L £12,000. The accounting entries required for expenses purchased that include VAT will be as follows: DR P&L account expense line with Gross value of invoice CR Creditors or Bank depending if purchases are on credit or for cash respectively DR VAT Recoverable from HMRC on balance sheet CR P&L Account expense line with the recoverable VAT DR Bank ( when HMRC Refund of VAT is received post VAT return filling) CR VAT Recoverable from HMRC on balance sheet This method is not suitable for accounting for VAT on Fixed Assets as it will result in total VAT being added to the value of Fixed Assets when acquired, thus potentially overstating them. (Unless the entity only makes exempts supplies and as such all of the VAT incurred is irrecoverable and should be included in the cost of the Fixed Asset) Net Method Using the net method of accounting for input VAT incurred on purchases means posting the net cost of the item(s) purchased to the expense line of the P&L. ( I.e. VAT will not be posted to the same expense line) The VAT incurred will be posted to a Balance Sheet VAT recoverable (HMRC debtor account) The accounting entries required for expenses that include VAT will be as follows: DR P&L account expense line with the net value of the expense (amount that excludes VAT) DR VAT Recovery account (HMRC debtor) on balance sheet with VAT amount on invoice CR Creditors or Bank with Gross invoice amount (Net plus VAT) depending if purchases are on credit or for cash respectively DR P&L Expense line with Irrecoverable VAT (the amount of VAT that can't be recovered from HMRC) CR VAT Recovery account (HMRC debtor) on balance sheet with the irrecoverable VAT figure. (the amount that can't be recovered from HMRC) DR Bank ( when HMRC Refund of VAT is received post VAT return filling) CR VAT Recoverable from HMRC on balance sheet Accounting for VAT on Fixed Assets Accounting for VAT on Fixed Assets uses the Net Method by booking only the net value of the asset plus any irrecoverable VAT to the balance sheet. Thus if the business can fully recover all its VAT then there will be no VAT to book as part of the cost of the fixed asset. If a business is partially exempt in that it makes taxable (standard rated & zero rated) and exempt supplies to its customers and thus can't recover all of the VAT it has incurred on the purchase of fixed assets, then the irrecoverable VAT will need to be booked as part of the cost of the asset on balance sheet. Key - Irrecoverable VAT incurred on the purchase of Fixed Assets is part of the cost of the Fixed Asset and must be posted along with the net cost to the Balance Sheet Fixed Asset account. The typical VAT accounting entries for Fixed Assets are shown below: DR Fixed Asset account on balance sheet with the net cost DR VAT Recovery account (HMRC debtor) on balance sheet with VAT amount on invoice DR Fixed Asset account with Irrecoverable portion of the VAT CR VAT Recovery account DR Bank ( when HMRC Refund of VAT is received post VAT return filling) CR VAT Recoverable from HMRC on balance sheet Accounting for Reverse Charge VAT on Costs Accounting for Reverse Charge VAT means the business will have to self account for output and input VAT by multiplying the total value of the invoice received from the non UK vendor by 20% then booking this amount to the output VAT account on balance sheet and an equal amount of Input VAT to either the P&L cost account line or to the balance sheet VAT recoverable account depending on whether the gross or net method of accounting is used respectively. Note if the business only makes taxable supplies, then the input VAT will be fully recoverable from HMRC and as such there will be nothing to pay HMRC as shown in box 5 on the VAT return. If the business makes both taxable and exempt supplies then the input VAT incurred will be partially recoverable and this the difference between the output VAT and input VAT that is recoverable will be the amount payable to HMRC as shown in Box 5 on the VAT return The typical VAT accounting entries used for accounting for reverse charge are as follows: Gross Method DR P&L account expense line with Reverse Charge VAT amount CR Reverse Charge Output VAT account (BS) with Reverse Charge Amount DR VAT Recoverable (BS) from HMRC (Recoverable portion of reverse charge VAT) CR P&L Account expense line with the recoverable portion of Reverse Charge VAT DR Reverse Charge Output VAT account (BS) to transfer balance to VAT control account CR VAT Control Account (BS) with reverse charge output VAT DR VAT Control Account with recoverable reverse charge VAT CR VAT Recoverable (BS) transfer of balance to VAT Control Account Note: if the Reverse Charge VAT is fully recoverable then no more accounting entries will be required as the control account will now contain the Reverse Charge Output VAT and Reverse charge Input VAT and they will net off. (no payment due to HMRC) Where the Reverse Charge VAT is not fully recoverable due to the business being partially exempt, then the closing entry will be to pay HMRC the balance between the Reverse Charge output VAT less the recoverable Reverse Charge input VAT as follows: DR VAT Control Account (payment to HMRC) CR Bank (payment to HMRC) Net Method DR BS VAT Recoverable account with Reverse Charge VAT amount CR BS Reverse Charge Output VAT account DR P&L Expense line with Irrecoverable portion of Reverse Charge VAT (the amount of VAT that can't be recovered from HMRC) CR VAT Recovery account (HMRC debtor) on balance sheet with the irrecoverable VAT figure. (the amount that can't be recovered from HMRC) DR Reverse Charge Output VAT account (BS) to transfer balance to VAT control account CR VAT Control Account (BS) with reverse charge output VAT DR VAT Control Account with recoverable reverse charge VAT CR VAT Recoverable (BS) transfer of balance to VAT Control Account Note: if the Reverse Charge VAT is fully recoverable then no more accounting entries will be required as the control account will now contain the Reverse Charge Output VAT and Reverse charge Input VAT and they will net off. (no payment due to HMRC) Where the Reverse Charge VAT is not fully recoverable due to the business being partially exempt, then the closing entry will be to pay HMRC the balance between the Reverse Charge output VAT less the recoverable Reverse Charge input VAT as follows: DR VAT Control Account (payment to HMRC) CR Bank (payment to HMRC) VAT Accounting - Accounting for VAT in the P&L and BS

Find out how VAT works in Sweden - Link to tax authority - VAT Rates on Goods and Services Introduction The Standard Rate of VAT in Sweden is 25% and is levied on most goods and services and there are reduced rates of 12% and 6% for items such as hotel accommodation and books respectively. Similar to many other EU and non EU countries, Financial Services such as Loans (borrowings and advances), Foreign Exchange, Payment Services etc are Exempt from VAT. Please click on the attached button for more details. VAT Rates Applicable to Goods & Services sweden-VAT

VAT Recovery impacts profitability (P&L) so ensuring VAT is allocated and recovered using the appropriate allocation methodology and VAT recovery rate is key. VAT Recovery and It's Impact on Profitabiliy Introduction VAT will only become a major cost to a business if it is unable to recover all or some of the VAT incurred on costs from HMRC. The recoverability of VAT will depend largely on the type of supplies made by a business and whether these are taxable (billed including VAT or Zero Rated) or Exempt where no VAT is applicable on the supply. The below paragraphs aim to set out the basics of VAT recovery and how a businesses P&L will or can be impacted by decisions made by companies and the associated VAT cost. Fully Recoverable Businesses A business that is fully recoverable for VAT means that it only makes taxable supplies to its customers and as such it has the right to full recovery of the VAT incurred on its costs under HMRC rules. Therefore businesses that can fully recover VAT will have little or no P&L VAT cost. Partially Exempt Businesses Partially exempt businesses on the other hand that make a mixture of taxable and exempt supplies will not be able to recover all the VAT incurred on costs as some of the VAT relates to exempt supplies made by the business. Where a business only makes exempt supplies to UK customers, VAT incurred on costs will in most cases be irrecoverable and become a cost in the P&L. Businesses such as banks will usually be partially exempt as they usually supply a mixture of taxable and exempt financial services. To ensure partially exempt businesses obtain a fair and reasonable level of VAT recovery, they will need to have a method of VAT recovery which allows them to recover a percentage of the VAT incurred on costs. There are two methods for achieving this under HMRC rules, namely the Standard Method or using a Special Method that is negotiated and agreed with HMRC. The Standard Values Method calculation is as follows: Taxable Sales (Std rated + Reduced Rate and Zero Rated) = VAT Recovery % Total Sales (Taxable as above + Exempt Sales) The more taxable sales a business generates, the higher the VAT recovery rate will be. The VAT recovery rates will be multiplied but the pools of input VAT incurred in or allocated to a business area to arrive at the amount of VAT recoverable from HMRC. VAT recovery then becomes a credit to the P&L at either a single line level or at a profit centre / business segment level. Special Methods - are normally required where the business in question has a complex operational structure including VAT grouping, multiple product offerings, operates in different market segments, has service companies etc and as such the standard method may not provide a fair and reasonable VAT recovery outcome based on where VAT is consumed in the business. For example, a business making an equal amount of taxable and exempt supplies may not be consuming an equal amount of VAT. Special methods try to address these imbalances by specifying the basis of how VAT will be allocated fairly among different business areas. Special methods for example can use VAT recovery methods based on transaction counts, floor space, sales credits, industry specific methods etc instead of values, but will all most likely use the same formula as the standard method but with different headings. For example the number of taxable transactions or the number of taxable sales credits. VAT recovery methods will produce different outcomes in terms of VAT recovery but HMRC's key aim is to ensure the method is fair and reasonable and is based on a business allocating its VAT based on how the associated costs are consumed within the business. How VAT Can Impact Profitability VAT Groups - Offer companies a way to simplify their intercompany billing and VAT reporting to HMRC by allowing companies to form VAT groups by bringing a number of entities under a single UK VAT registration and with one entity being the representative member. This allows members of the group to: File a single consolidated Group VAT Return and eliminating the need to file multiple standalone VAT returns Enables members of the VAT group to buy and sell goods and services without the need to add VAT to their invoices as transactions are deemed to be outside the scope of VAT. Note - Failure to set up a VAT group where entities are partially exempt would introduce and increase the VAT costs in the P&L as not all of the VAT billed on invoices from related entities would be recoverable from HMRC. Reverse Charge VAT - UK Companies that purchase services from entities outside the UK will normally have to self account for UK reverse charge VAT at 20% to HMRC. This measure ensures that there is a level playing field for UK suppliers and prevents UK companies from simply sourcing services from outside the UK to reduce costs by not paying UK VAT. For example, a UK VAT registered company that purchases consultancy services from a French company will receive an invoice from the French company which will not include VAT but the UK company will have to add 20% VAT to the value of the invoice and include this VAT on its VAT return to HMRC. The UK company if it is a fully taxable business, will normally be able to fully recover this VAT from HMRC and in effect will not pay HMRC any VAT as the VAT payable and VAT recoverable will net to zero on their VAT return in box 5. On the other hand if the UK company is a partial exempt entity (as above) such as a bank, it will only be able to recover a percentage of the reverse charge VAT payable to HMRC and as such the irrecoverable portion of the VAT will become a P&L cost. Note (a) Reverse Charge VAT will also be applicable to services purchased and or recharged from overseas subsidiaries that are not members of the UK VAT group by virtue of having a UK branch within the VAT group. Reverse charge VAT will apply to transfers of intangibles such as branding charges and goodwill. Also see VAT cases Skandia and Danske on the VAT news page which can have an impact on VAT. Note (b) Reverse Charge VAT of 20 % should always be built in to budgets that contain costs relating to services that will be purchased from overseas. Failure to do this can lead to nasty surprises and significant cost VAT cost when VAT suddenly has to be accounted for to HMRC. Cost Recharges from the UK to Overseas Subs and Branches - Another area that can be overlooked in terms of VAT cost is where a company incurs or pays for UK costs including VAT and or non UK costs plus reverse charge VAT on behalf their overseas subs and branches. Where the underlying services are provided and consumed by the overseas entities, then there is the potential for full VAT recovery on these costs instead of partial recovery if the UK entity is a partially recoverable business. (makes a mixture of taxable and exempt supplies (See above). This area can often be overlooked and as such companies can incur significantly more irrecoverable VAT in the P&L Fixed Establishment and VAT Grouping - The term Fixed Establishment from a HMRC point of view refers to a company resident in the UK that has a sufficient degree of structure and permanence in terms of human and technical resources to enable it provide the services that it supplies. A company may generally be considered to have a “fixed establishment” in the UK if it has a real trading presence in the UK, that is to say, if: it has a permanent place of business in the UK, and that place of business comprises sufficient human and technical resources for it to carry on its business activities A company is not considered to have a “fixed establishment” in the UK merely as a result of the fact that: it has a “brass plate” presence in the UK it carries on business through a UK agent, or it has a UK subsidiary. One of the conditions of a company joining a VAT group is that it has a fixed establishment in the UK. As such a branch of an overseas entity can be a member of a UK VAT group and as such the overseas parent will also become a member of the UK VAT group by virtue of its branch. Intercompany recharges between the overseas entity and its branch and other members of the VAT group can therefore be disregarded for VAT (subject to anti avoidance rules Sec43 (2a) ). This therefore means that reverse charge VAT as mentioned above will not be applicable to these transactions and as such irrecoverable VAT can be eliminated where members of the VAT group are partially exempt. Note: - When registering companies as members of a VAT group in the UK, it is imperative that the rules around fixed establishment are water tight otherwise VAT grouping for companies and/or branches can be withdrawn (de-grouping) by HMRC and past supplies then become subject to assessments which can have a major impact on P&L where the VAT is irrecoverable and interest is charged by HMRC.

Barter and Part Exchange - Comprehensive VAT Guide on the rules and HMRC guidance relating to barter and part exchange transactions between business in the United Kingdon. Introduction Similar to many other transactions, Barter and Part Exchange are taxable and treated as follows: Barter Transaction A barter transaction occurs where one party supplies goods or services in exchange or payment for other goods or services. The tax point for such transactions is when the transaction takes place. The nature of barter transactions is that two supplies are made as follows: A supply from one supplier to the customer A supply from the customer to the supplier VAT Liability The VAT liability of barter transactions is based on the arms length value of each item bartered. Basically the market price that would have been paid had the goods or services been purchased and sold without bartering. Part Exchange Part exchange follows the sames rules as transactions traded using barter. Set Offs A set off occurs where one individual owes another for a service provide or goods sold and both parties agree for the owing party to provide a service to clear the debt. For example an Accountant maybe owed money by his client who is a butcher and both agree for the butcher to provide the accountant with 2 months worth of Steak to settle. Here the tax point occurs when an invoice is issued or the set off is recorded in the accounting records of the parties. VAT Liability Again two separate supplies have been made and both parties will have to account for VAT regardless of whether any cash has been paid. -Contains public sector information licensed under the Open Government Licence v3.0. Barter & Part Exchange - VAT Guide for Barter Transactions

VAT Guide For Switzerland - Find out how VAT works in including VAT rates, VAT rules, VAT registration, imports and exports, VAT liability of goods and services and much more. Introduction VAT is a tax on consumption and an important source of revenue for the state. It is paid by consumers but levied on businesses. The price that customers pay for goods and services already includes value-added tax. The business selling the goods or providing the service collects the VAT and gives it to the state. If a business has to buy other products or services (inputs) in order to produce their own goods or provide their own services, it can deduct the VAT paid for them from the VAT it has received from its customers and has to send to the state. This is called an input tax deduction. Rates of VAT There are three different VAT rates in Switzerland: Standard Rate 7.7% - (Services, Alcohol Etc) Special Rate 3.7% - Accommodation services (overnight stays with breakfast) in the hotel and accommodation business (e.g. letting of holiday apartments) are subject to a rate of 3,7 %. Reduced Rate 2.5% applies to: A reduced rate of 2,5 % applies for certain categories of goods and services, particularly: Foodstuffs (except alcoholic beverages) according to the Foodstuffs Act of 20 June 2014 (exception: the normal rate applies for foodstuffs that form part of restaurant services); Cattle, poultry, fish; Seeds, living plants, cut flowers; Grains; Animal feed and fertilizer; Medications; Newspapers, magazines, books and other printed products without advertising character of the kinds to be stipulated by the Federal Council; Electronic newspapers, magazines and books without advertising character of the kinds to be stipulated by the Federal Council; Services of radio and television companies (exception: the normal rate applies for services of a commercial nature). There are also items that are exempt from VAT such as Education, Health, Rent from property Registration Threshold Businesses based in Switzerland - Annual turnover greater than CHF 100,000 must register and pay value added tax. They must register with the Federal Tax Administration and account for their sales annually. When they register, they are given a VAT number. Businesses based outside Switzerland that make sales in Switzerland - Annual turnover greater than CHF 100,000 must register and pay value added tax. They must register with the Federal Tax Administration and account for their sales annually. When they register, they are given a VAT number. Event Organisers - Organisers of one-off sports, cultural or other events (e.g. village or street festivals) are required to charge VAT. This applies if they earn at least CHF 100,000 from the sale of food and drink, advertising, etc. Clubs - Charitable institutions or non-profit associations that are run on a voluntary basis must register for VAT if they have a turnover of CHF 250,000 or more. Switzerland-VAT

Find out how VAT works in Austria VAT including VAT rules, VAT registration, imports and exports and much more. VAT - Ghana VAT - Ghana Austria-VAT Introduction There are three main rates of VAT in Austria, Standard Rate 20% , Reduced Rate 13% and Reduced Rate 10%. VAT Rates VAT Exemptions VAT Return Taxable Supplies Invoicing Reverse Charges Input VAT Deduct

VATDIGITAL.COM - A leading global VAT news and compliance platform providing businesses and individuals with the latest VAT news, compliance guides, industry news and advice. VAT Digital. Com VAT Digital. Com VAT Digital. Com - Advertise or Sponsor us Demystifying VAT Making VAT Simple The idea for VATDIGITAL.COM was conceived out of the need to help Businesses owners, Entrepreneurs and Individuals access useful information and news about VAT easily and quickly from a single platform. The site has evolved and now provides a combination of VAT & GST news, VAT and Tax and specific industry guides, tax tools and other key links in relation to UK and Global VAT compliance. The site has an inbuilt AI driven VAT advisor which allows visitors to obtain detailed answers and guidance for specific queries in relation to VAT and GST 24/7. The site's development and provision of services is ongoing and continually evolving and will be enhanced to reflect key VAT and other general Tax trends. As founder, I hope you find our site informative and useful. Please follow us on Linkedin. Lastly If you would you like to advertise your business on this site or sponsor us, then please email: enquiries @vatdigital.com Anthony Ene - Founder VAT Digital AI VAT advisor online 24/7

Comprehnsive guide for the different VAT rates applicable to various goods and services in the UK, including Health, Transport, Land & Buildings, Education, Charities etc. VAT Rates For Goods & Services Food and Drink Food and drink for human consumption is usually zero-rated but some items are always standard-rated. These include: catering alcoholic drinks confectionery crisps and savoury snacks hot food sports drinks hot takeaways ice cream soft drinks and mineral water Restaurants must always charge VAT on everything eaten either on their premises or in communal areas designated for their customers to use, such as shared tables in a shopping centre or airport food courts. In addition, restaurants and takeaway vendors must charge VAT on all hot takeaways and home deliveries, but do not need to charge VAT on cold takeaway food unless it’s to be eaten in a designated area. Animals and animal food Supplies of live animals that are zero-rated You can zero rate the sale, hire or loan or supply of a part interest (a share) of a live animal provided it’s of a kind generally used in the UK, or yielding or producing food for human consumption. Animal includes bird, fish, crustacean and mollusc. Examples of Zero Rated Animals are: meat animals dairy animals poultry (except ornamental breeds), including those for egg production, honey bees fish (except ornamental breeds and coarse fish), including those for production of edible roes Animals that are standard-rated Examples of standard-rated animals are: bumble bees ornamental birds and fish racing pigeons horses Live kangaroos Pets Animals that will be kept as pets can be zero-rated only if they are of a kind that is normally used for human food production. For example, rabbits, other than ornamental breeds, are always zero-rated. Animals kept for non-food purposes Animals kept for non-food purposes can be zero-rated if they are of a kind normally producing food for human consumption. Sheep kept mainly for their wool, or bulls used for breeding are zero-rated. Birds Most breeds of chicken are zero-rated, as are game birds and ostriches. Ornamental breeds of birds are standard-rated. The following breeds of ducks, geese and turkeys are zero-rated: Type of fowl Breed Ducks - Aylesbury, Campbell (Khaki Campbell), Indian Runner, Muscovy, Pekin and derivatives and crossbreeds of these Geese - Brecon Buff, Chinese Commercial, Embdem, Roman, Toulouse and derivatives and crossbreeds of these Turkeys - Beltsville White, British White, Broadbreasted White, Bronze (Broadbreasted Bronze), Norfolk Black and derivatives and crossbreeds of these Fish Freshwater fish - Eels, salmon and trout and others recognised as food for human consumption are zero rated. Bream, perch, pike, carp and tench are standard rated. Shellfish - Oysters, mussels, whelks are zero rated while non food species are standard rated Fish for aquaria -All supplies are standard rated Fish used as bait - Fish of a kind, and fit for, human consumption are zero rated and all other supplies are standard rated. Ornamental fish - for example koi carp Agricultural and horticultural crops Crops covered by the relief All crops that are specifically grown to produce food of a kind for human consumption or animal feeding stuffs are zero-rated. The zero rate also applies to seeds, seedlings, crowns, spores, tubers and bulbs of edible vegetables and fruit. What’s not covered by the relief Any crop that generally produces items that are not fed to humans or animals is always standard-rated. Plants that are primarily grown for their ornamental effect (such as ornamental nursery stock including trees, shrubs, herbaceous plants, alpines and pot plants) are standard-rated. Plants, seeds and fruit of a kind used for the production of perfumes, pharmaceutical products, insecticides, fungicides and other non-food uses are standard-rated. Some examples of plants that are standard-rated are: Evening primrose, because this is grown for the extraction of its oil Tulips and Hyacinths, because these are grown and sold for ornamental purposes Norfolk reed, because this is grown for thatching material Sport, leisure, culture and antiques Betting and gaming — including pool betting and games of chance is Exempt from VAT Bingo — including remote games played on the internet, telephone, television or radio is Exempt from VAT Bingo — including remote games played on the internet, telephone, television or radio is Exempt from VAT Lottery ticket sales is Exempt from VAT Online lottery games is exempt from VAT Retailer commission on lottery ticket sales is Exempt from VAT Culture Admission charges by public authorities or eligible cultural bodies to certain cultural events such as visits to museums, art exhibitions, zoos and performances is Exempt from VAT Antiques Antiques, works of art or similar (as assets of historic houses) sold by private treaty to public collections are exempt from VAT Antiques, works of art or similar (as assets of historic houses) used to settle a tax or estate duty debt with HMRC again are exempt from VAT Health, education, welfare and charities Charities Admission charges by charities are Exempt from VAT Advertising services for charities VAT are zero rated Certain goods sold at charitable fundraising events are zero rated Charitable fundraising events are Exempt from VAT Charity shops — selling donated goods is zero rated for VAT Construction and sale of new buildings for a relevant charitable purpose are zero rated for VAT Energy-saving materials permanently installed in dwellings and buildings used for a relevant residential purpose providing the total cost of them (not including VAT) is not over 60% of the cost of the installation of the products (not including VAT) 5% reduced rate VAT applies. Energy-saving materials — supply only — are Standard-Rated (20%) Sponsored charitable events are Exempt from VAT. Voluntary donations to charities are outside the scope of VAT Welfare Building services for disabled people are zero rated for VAT Burial or cremation of dead people, or burial at sea is Exempt from VAT Mobility aids for the elderly, 5% reduced rate VAT applies Equipment for blind or partially sighted people is zero rated Equipment for disabled people is zero rated for VAT Funeral plans written under contracts of insurance are Exempt from VAT Smoking cessation products — nicotine patches and gum, 5% reduced rate VAT applies Welfare services provided by charities at significantly below cost are Outside the scope of VAT Magnetic tape adapted for recording speech for blind people together with apparatus for making and playing the adapted tape and certain low vision aids are zero rated. Health Care or medical treatment provided by a qualifying institution like a hospital, hospice or nursing home are Exempt Dispensing of prescriptions by a registered pharmacist is zero rated for VAT Health services provided by registered doctors, dentists, opticians, pharmacists and other health professionals is Exempt from VAT Incontinence products are zero rated. Maternity pads are zero rated Sanitary protection products are zero rated Low vision aids are zero rated Education Education and vocational training provided by an eligible body other than a ‘private school’. Goods or services closely connected to the education provided by an eligible body like a school, college or university is Exempt from VAT. VAT Notice 701/30 Building and construction Substantial reconstructions to protected buildings that are buildings used as a dwelling, for a relevant residential purpose or for a relevant charitable purpose is zero rated VAT Notice 708 The installation of a bathroom or lavatory, constructing ramps and widening doorways or passageways for disabled people in their own home is zero rated Building services for disabled people Construction and first freehold or long leasehold sale of a new building for a relevant charitable purpose is zero rated. VAT Notice 708 Construction and first freehold or long leasehold sale of a new building for relevant residential purposes is zero rated. VAT Notice 708 Construction and first freehold or long leasehold sale of new domestic buildings is zero rated. VAT Notice 708 Converting existing premises by increasing the number of dwellings within the building, 5% VAT applies. VAT Notice 708 Renovating a dwelling that has been empty for at least 2 years 5% VAT applies. VAT Notice 708 First freehold or long leasehold sale of a commercial building converted into a dwelling or dwellings is zero rated. VAT Notice 708 First freehold or long leasehold sale of buildings converted for relevant residential purposes is zero rated. VAT Notice 708 First freehold or long leasehold sale of buildings converted for relevant charitable purposes is zero rated. VAT Notice 708 Land and property Garages or parking spaces let together with dwellings (under short hold tenancy agreements) for permanent residential use are Exempt from VAT. — VAT Notice 742 Parking — grant, or licence, to occupy land on which incidental parking takes place is Exempt from VAT. VAT Notice 742 Property, land and buildings — grant, or licence, to occupy land or buildings is Exempt from VAT. VAT Notice 742 Sale or long lease of a new dwelling with garage or parking space is zero rated for VAT. VAT Notice 708 Transport, freight, travel and vehicles Transport Aircraft repair and maintenance is zero rated for VAT. VAT Notice 744C Travel Houseboat moorings are Exempt from VAT. VAT Notice 742 Parking spaces or garages supplied with houseboat moorings are Exempt from VAT. VAT Notice 742 Passenger transport in a vehicle, boat or aircraft that carries not less than 10 passengers is zero rated for VAT. VAT Notice 744A Tolls for bridges, tunnels and roads operated by public authorities is Outside the scope of VAT. Privately-operated tolls for bridges, tunnels and roads are standard-rated — VAT Notice 700 Freight Freight transport to or from a place outside the UK is zero rated for VAT. Domestic freight transport is standard-rated, unless it is the domestic leg of freight transport between the UK and another country in which it is zero rated. — VAT Notice 744B Freight containers — sale, lease or hire to a place outside the UK and the EU is zero rated. VAT Notice 703/1 International freight transport that takes place in the UK and its territorial waters is zero rated. VAT Notice 744B Vehicles Aircraft repair and maintenance is zero rated. VAT Notice 744C Airships — sale or charter is zero rated. VAT Notice 744C Caravans (more than 7 metres long or more than 2.55 metres wide) is zero rated or 5%. Taxing holiday caravans Civil aeroplanes — sale or charter is zero rated for VAT. Gliders — sale or charter — are standard-rated as are hot air balloons — VAT Notice 744C Helicopters — sale or charter is zero rated for VAT. VAT Notice 744C Houseboats — sale or let out on hire is zero rated for VAT, But holiday accommodation let in a moored houseboat is standard-rated — VAT Notice 701/20 Military aeroplanes — sale or charter is zero rated for VAT. VAT Notice 744C Ship repairs and maintenance is zero rated for VAT. VAT Notice 744C Shipbuilding — 15 tons or over gross tonnage is zero rated for VAT. VAT Notice 744C Printing, postage, publications — books, magazines and newspapers Printing Brochures is zero rated for VAT. VAT Notice 701/10 Leaflets is zero rated for VAT. VAT Notice 701/10 Pamphlets is zero rated for VAT. VAT Notice 701/10 Postage Direct-mail postal services meeting all the conditions of VAT Notice 700/24 3.2 and 3.3 are Outside the scope of VAT. VAT Notice 700/24 Postage, packing and delivery within the UK included in the sales contract but charged for separately, for example, mail order The same rate as the goods being delivered or posted Postage, packing and delivery within the UK charged as an optional extra is always standard-rated — VAT Notice 700/24 Public postal services provided by the Royal Mail under a universal service obligation are Exempt from VAT. Standard Royal Mail first and second class services for example Other postal services that are not subject to a universal service obligation are Standard-Rated (20%) Supplies that are not subject to regulation Publications Books are zero rated for VAT. VAT Notice 701/10 Children’s painting and picture books are zero rated for VAT. VAT Notice 701/10 Maps and charts are zero rated for VAT. VAT Notice 701/10 Magazines are zero rated for VAT. VAT Notice 701/10 Newspapers are zero rated for VAT. VAT Notice 701/10 Printed or copied music are zero rated for VAT. VAT Notice 701/10 Publications are zero rated for VAT. Some items are standard-rated such as exercise books, letterheads, posters — VAT Notice 701/10 Clothing and footwear, protective and safety equipment Clothing and footwear Babywear is zero rated for VAT. VAT Notice 714 Children’s clothes and footwear is zero rated for VAT. VAT Notice 714 Protective and safety equipment Carrycots with restraint straps, 5% VAT applies. VAT Notice 701/23 Children’s car seats, booster seats and booster cushions , 5% VAT applies. VAT Notice 701/23 Children’s safety seats with bare wheeled framework, 5% VAT applies. Prams and pushchairs are standard-rated (20%) — VAT Notice 701/23 Cycle helmets — CE marked are zero rated for VAT. VAT Notice 701/23 Motorcycle helmets that meet safety standards are zero rated for VAT. VAT Notice 701/23 Protective boots and helmets for industrial use are zero rated for VAT. VAT Notice 701/23 Open Government Licence v3.0