UK VAT explained including when businesses are required to register for VAT, HMRC rules and how VAT is applied to different types of goods and services and when VAT can be recovered. VAT (Value Added Tax) is a tax on consumption and is added to the sale of goods and services supplied by VAT Registered businesses. Not all products and services sold attract VAT and there are a number of VAT rates or categories as follows: Standard Rated 20% (taxable) Reduced Rate 5% (taxable) Zero Rated (taxable) Exempt Outside The Scope Depending on the goods being sold or services being provided, one of the categories above will be applied to the sale. Standard Rated Goods and Services Standard Rated goods and services are goods sold or supplied by VAT registered businesses and include 20% VAT. Therefore invoices to customers will include 20 % VAT. Standard Rated services fall into the taxable services bucket and where businesses make taxable sales and exceed or are likely to exceed £90,000 , they are required by law to Register for VAT. Examples of Standard Rated goods and services include: Fuel Professional Services such as Legal and Accountancy Computers and Mobile phones Hotel Accommodation No Domestic Energy Alcohol Restaurant food and hot takeaways Goods and Services with Reduced Rate VAT of 5% Reduced rate VAT of 5% is mainly applied within the domestic fuel and construction industry. Examples of Reduced Rate VAT at 5% include: Domestic / residential energy bills (Gas & Electric) Gas fired boiler installation Radiator Connection or re-connection to the gas mains Renovating a dwelling that has been empty for at least 2 years Zero Rated VAT Goods and services supplied as Zero Rated VAT are taxable supplies but without VAT applied. Therefore invoices generated and sent to customers for zero rated supplies will not include VAT. Examples of Zero Rated goods and services include: Children's clothing Books Sewerage services supplied to domestic or industrial customers Water supplied to domestic households Insulation Take away - cold food Note: where businesses make sales of goods and services to non UK business customers, these can also be treated as Zero Rated in some instances as they are deemed outside the scope of UK VAT but are classed as taxable services which carry the right to deduct Input VAT. (Please see place of supply button) Exempt Goods and Services Exempt supplies of Goods and Services unlike standard rated and zero rated are not taxable supplies. Exempt supplies are listed in the VAT Act 1994 Sch 9 and include the following: Postal Services Insurance Land and Property Rental Education Financial Services VAT Registration Businesses in the UK (including Isle of Man) are required to register for VAT If the value of their Taxable Turnover (standard rate, reduced rate and or zero rated supplies) in the preceding 12 months or less goes over the registration threshold of £90,000 If the value of their taxable turnover (standard rate, reduced rate and or zero rated supplies) is likely to exceed £90,000 in the next 30 days if the business is based outside the UK and supplies goods or services in the UK or are expected to in the next 30 days. (Threshold does not apply here) If a businesses is being acquired by a VAT registered business as a going concern If you make distant sales into Northern Ireland and exceed the annual threshold. Note: Businesses include Sole Traders, Partnerships, Limited Companies, Clubs, Associations. What is Taxable Turnover Standard Rated Sales of goods and services Zero Rated Goods and Services Reverse Charge Output VAT Any Goods or Services you barter or part exchange The value of any goods you have used for private use Property services supplied (rent and service charges) where you have opted to tax the building. What is not Taxable Turnover Sales of capital items such as buildings , machinery, cars Exempt supplies Voluntary Registration Yo u can apply to HMRC for voluntarily registration if: you are making taxable supplies where their value is under the £90,000 threshold. This will allow you to recover VAT expenses incurred. You are intending to make taxable supplies in the near future Register - onl ine here Tax Point R ules Tax points are the specific points in time when sales of goods or services take place and are governed by rules set out by HMRC. VAT registered businesses must account for VAT within the period the tax points for their sales occur. So if a tax point occurs in March and the businesses next VAT return period is January to March then the VAT on the sale will have to be included within the quarter ending March VAT return. Basic Tax Point Goods - The date when you send them to your customer or the customer takes them away or for goods assembled at a suppliers premises, when the goods are made available to the customer Services - The date when the service is performed — it’s normally taken as the date when all the work except invoicing is completed Actual Tax Point The basic tax point will be overridden if an actual tax point is created. An actual tax point is created when: An invoice is issued or payment is received (whichever is first) before the basic tax point. An invoice is issued up to 14 days after the basic tax point You do not have to follow the 14 day rule, but if you decide not to you must tell HMRC by writing to the VAT Written Enquiries Team . If you wish to have an extension of the 14 day rule, then you must apply to HMRC by writing to the VAT Written Enquiries Team , giving your reasons. Note: Failure to tell HMRC about extending the 14 day rule will result in the tax point reverting to the basic tax point. Continuous Supplies of Services If you supply services on a continuous basis and receive payments regularly or from time to time, there’s a tax point every time you issue a VAT invoice, or receive a payment, whichever happens first. If payments are due to be made at regular intervals (for example, by banker’s order or direct debit), you can issue a VAT invoice at the start of any period of up to one year (provided that more than one payment is due in the period) to cover all the payments due in that period. For each payment you should set out the: VAT-exclusive amount Date on which the payment is due Rate of VAT VAT payable If you decide to do this, you do not have to account for tax on any payment until the date on which it is due, or date you receive it, whichever happens first. Your customer must not reclaim, as input tax, any VAT shown on the VAT invoice until the date on which the payment is due, or you have received the payment, whichever happens first. The same procedures apply to continuous supplies of goods, in the form of water, gas and electricity. Goods supplied on sale or return, approval or similar terms When you supply goods on sale or return, for example, they have not been sold and you still own them until such time as they’re adopted by your customer. Adoption means that the customer indicates a wish to keep them. Until your customer does so, your customer has an unqualified right to return them at any time, unless you have agreed a time limit. You may have fixed a time limit of adoption of less than 12 months from the date when the goods were sent. If a time limit has: Been fixed for a period of 12 months or less, then the Basic Tax Point is the date the time limit expires Not been fixed or fixed for a period of more than 12 months, then the Basic Tax Point is 12 months from the date when the goods were sent Note: In either case if your customer adopts the goods before the time limit expires the date of adoption becomes the basic tax point. Also the basis tax point as mentioned above will be overridden by the actual tax point on the date an invoice issued by the business providing the goods or the date payment is received for the goods, which ever is earlier. If you receive a payment which is not returnable, this will normally indicate that the goods have been adopted. The payment of a deposit required as a condition of delivery — which is repayable if the goods are returned — does not constitute adoption. Finally, It is a businesses responsibility to make sure that its customers notify them promptly when they have adopted goods. Goods taken for personal or other non-business use Goods that are taken out of a business: Permanently for non-business use will have a basic tax point on the date when the goods are taken or set aside for this purpose Temporarily for non-business use, but they’re still part of its stock or business assets, then a tax point is triggered each time they’re used or — if the non-business use continues over a period of time — on the last day of each tax period that the goods are used or made available for that purpose VAT Returns VAT Registered businesses that make supplies of goods and services are required to file their VAT returns to HMRC either monthly or quarterly (depending on VAT scheme) to pay over the Output VAT collected on sales to their customers and also to recover any Input VAT they have incurred on supplies they have purchased for operating their business. The difference between the Output VAT collected and the Input VAT incurred will form the basis as to whether VAT is payable or recoverable from HMRC. VAT collected on Sales greater than VAT incurred on purchases = Payment due to HMRC VAT incurred on purchases greater than VAT collected from customers = Recovery of VAT from HMRC Any exempt and zero rated supplies a firm makes to its customers or purchases from its suppliers also need to be included on the VAT Returns in boxes 6 and 7 respectively. Partial Exemption - VAT Recovery In addition to Output VAT that is collected by a business on its sales and then paid over to HMRC, businesses can also recover VAT on expenses they incur. The recovery of VAT depends highly on the nature of the supplies being made by the business. Business is only making Taxable Supplies (Standard rated, reduced rate or zero rated) - then the Input VAT incurred on its purchases is directly attributable to its taxable sales and can be fully recovered from HMRC. Business only makes Exempt Supplies - Then it cannot recover any of the input VAT incurred on purchases as the input VAT is directly attributable to supplies of exempt goods or services. Businesses making a mixture of Taxable and Exempt Supplies - This type of business is known as a partially exempt business and because not all of its supplies are taxable, it can only recover a calculated percentage of the input VAT it has incurred. Partially Exempt Businesses - will be required to calculate their partial exemption recovery percentage or rate and then apply this rate to their pool of input VAT that they have incurred. The standard method for calculating the partial exemption recovery rate is as follows: Taxable Sales (Standard, Zero, Reduced Rate) / Total Sales (Standard, Zero, Reduced Rate, Exempt) = VAT Recovery Rate Percentage % Example - Standard Rated Sales £1,000, Zero Rated Sales £500, Reduced Rated Sales £200 and Exempt Sales £2,000 £1,000 + £500 + £200 / £3,700 = 46 % RR If the input VAT pool is £20,000, then the business can recover £9,189 from HMRC via its VAT return. Note: Many larger and more complex businesses (such as banks) will have Partial Exemption Special Methods which will have been formulated specifically for their business and agreed with HMRC. Many businesses will have multiple internal business areas and products and as such using the standard method may not be suitable. Once formulated businesses will be required to adhere to their agreed Partial Exemption Special Methods and keep HMRC up to date on any internal business restructures that might affect the agreed method. HMRC - has the right to issue a Special Method Override where they believe the existing method in use does not produce a fair and reasonable level of VAT recovery. Annual Input VAT Adjustments As part of the VAT return process partially exempt businesses are required to complete annual Input VAT adjustments to ensure the correct amount of VAT has been recovered from HMRC for the overall year. Normally businesses will file quarterly VAT returns which include VAT recoverable for the quarter. The recovery of VAT on the quarterly returns will be based on the input VAT allocated between Taxable and Exempt sales for the quarter or based on the previous years VAT recovery rates which are being provisionally used for the current year until the annual adjustment is completed. So VAT returns completed during the year are actually provisional in terms of the recovery of VAT. As such at the end of the year input VAT recovery will need to be revisited to: Review how input VAT has been used in the business to see if there has been any change in use. (Taxable / Exempt) Recalculate VAT Recovery Rates based on the current years sales data Review input VAT allocations to different areas of the business Once the above process has been completed, the recalculated input VAT recovery for the whole year will then be compared with the input VAT reclaimed on the quarterly returns. Any under or over recovery of VAT will then be refunded or repaid to HMRC normally via the first VAT return of the following year. From a business perspective, it maybe important to carry out mid year reviews of the VAT recovery by looking at aspects such as actual VAT incurred and Actual VAT recovery rates so as to not have large swings in irrecoverable VAT which can affect P&L where the input VAT throughput is significant. (Most relevant to partially exempt businesses where VAT recovery is high). Reverse Charges Where firms purchase services from non UK suppliers that would normally have VAT applied in the UK, they will have to self account for reverse charge VAT in the UK. The purpose of this measure is to ensure UK companies have a level playing field competitively and as such ensure companies do not make their purchases abroad just to avoid paying 20% VAT. The following purchases would attract Reverse Charge VAT Legal and Accountancy services Software Advertising Consultancy For example if a UK company purchased legal services from a company in France for £1,000 then the UK company would have to include £200 on its UK VAT return as output VAT and will equally it will able to include £200 as recoverable input VAT. Note: as mentioned under partial exemption above, the level of input VAT recoverable by a business will depend on the type of sales it makes. If a firm only makes taxable (standard and zero rated supplies), then it will be able to recover the full £200 reverse charge VAT which is payable to HMRC. In this case, as the reverse charge VAT payable is equal to the reverse charge VAT recoverable and as such there is nothing to pay HMRC. If the firm also made exempt supplies to it's customers and the French legal fee charge was not related to a specific taxable supply being made by the UK company, then it would only be able to recover a portion of the £200 reverse charge VAT based on its Partial Exemption Recovery rate. On its VAT return the business would enter £200 in box 1 (Output VAT) and £200 in box 4 (input VAT recoverable) and thus box 5 ( VAT payable of recoverable from HMRC ) would be nil. The net values of the services would go in box 6 (net outputs) and (net inputs) respectively. For more information on reverse charges, please click on reverse charge button on the home page. Pre VAT Registration Expenses Where a business buys goods or services before it registers for VAT, to support taxable business activities when it is registered, it can recover the tax provided that: in the case of goods (either stock for resale or fixed assets), the goods remain on hand at the date of registration and will be used in the newly registered business. These goods must have been bought within the time limits that are set out in regulation 111; for businesses with a registration date after 1 April 2010 the time limit will be 4 years in the case of services the supply was made not more than six months before the date of registration. Six months represents a period in which it is deemed that services obtained will relate to business activity carried on at the time of registration. Tax incurred on goods on hand at registration (other than capital items - see below) cannot be deducted if the VAT was incurred outside of the time limits set out in regulation 111. This includes VAT incurred on services performed on those goods. If a business is given a backdated registration date this becomes the relevant date for working out the extent of the time limits. Businesses are not required to reduce the VAT deducted in respect of pre-registration use of fixed assets. For example, VAT incurred on a van purchased three years before registration and used before and after registration would be recoverable in full, subject to the normal rules on VAT deduction. You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your ‘business purpose’. This means they must relate to VAT taxable goods or services that you supply. Please see below HMRC link for more information. VIT32000 - How to treat input tax: pre-registration, pre-incorporation and post-deregistration claims to input tax under regulation 111 - HMRC internal manual - GOV.UK (www.gov.uk) Required VAT Records and Accounts All taxable persons must keep and preserve certain records and accounts. This VAT record-keeping requirements that anyone who is registered for VAT must comply with includes: The VAT account What records must be kept Maintaining and preserving records For more information see Record keeping (VAT Notice 700/21) . -Contains public sector information licensed under the Open Government Licence v3.0. UK VAT Explained - What is VAT & when businesses need to register for VAT

International VAT News - read our collection of international VAT news articles from multiple news websites from around the globe including UK and global sites. "Take the heavy lifting out of your role search!" International VAT News - Read the latest VAT News Headlines Updated 24/7 International VAT News articles from across the globe - providing you with up to date information on changes in global VAT & GST rates & legislation, the ongoing digitalisation of VAT functions and processes including AI and other smart technologies. VAT Digital.Com Demystifying VAT

VATDIGITAL.COM - Providing you with the latest UK and Global VAT News, VAT Compliance Guides, e Invoicing Updates, Country Guides and an AI VAT Advisor - online 24/7. About - VAT Digital.Com - UK & Global VAT News & Compliance Making VAT Simple VAT Digital.Com - Is a London based VAT News, Compliance and Technology platform designed to seamlessly "Demystify VAT " and help businesses and individuals to stay compliant by providing the latest UK & Global VAT , GST & US Sales Tax News, HMRC and other global Tax Authority updates, case law updates and analysis, VAT compliance guides & Tools, VAT calculators, country VAT guides & rates, global E invoicing mandates and implementation timelines. Our website also provides UK VAT guides and updates for specific industries and areas such as Financial Services and Banking, Energy, Construction, Charities, Hospitality & Catering, Taxis & Private Hire and much more. For specific queries on VAT and GST, please use our AI driven " VAT Advisor " for quick, immediate and reliable online guidance 24/7. We hope you find the information on this site useful and enhancing. For any queries, please email the team at enquiries@vatdigital.com or contact us using the form below. VAT DIGITAL. com VAT - TAX - Accountancy - London Anthony Ene - Founder - Accountant & Tax Specialist Our website is updated regularly by our Team of VAT and Tax specialists who have years of experience working in industry and practice. To contact us, please use the form opposite and we will endeavour to get back to you as soon as possible. Alternatively please use the "Lets chat" button. We hope you enjoy reading and find the information on our website enhancing and useful. Best Regards The Team - vat digital .com -------------------------------------------------------------------------------------------------- - Email: enquiries@vatdigital.com Submit Thanks for submitting!

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 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

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

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

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

Guide on the HMRC rules around VAT on employee expenses and when VAT can be recovered on employee expenses such as travel, Hotels, Meals, Mobile Phones, Introduction Businesses can recover the VAT on most employee expenses but there are conditions and blocks on their recovery in some instances. Input VAT is Recoverable on the Following Employee Expenses Meals Meals provided via canteen facilities to staff Subsistence payments made to employees for meals Subsistence payments for meals made to Sole Traders, Proprietors, Directors while working away from their normal place of work. Hotel Accommodation Cost of hotel stay while away from the normal place of work Travel Cost Input VAT incurred on travel for Business purposes is recoverable input VAT Domestic Accommodation If your business provides domestic accommodation for employees, you can treat VAT incurred on costs of providing the accommodation as input tax. Part of a domestic accommodation (such as a room) used as an office can be apportioned and any VAT incurred treated as the businesses recoverable input VAT. Mobile Telephones Provided to Employees VAT on the purchase and connection of a mobile phone - Where a business provides its employees with mobile phones for business use then, regardless of whether it allows private use, it can treat as input tax all the VAT it incurs on purchasing a phone and on standing charges for keeping it connected to the network providing the charges do not contain any element for calls. Business only call charges - If a business does not allow its employees to make private calls, all of the VAT incurred on the call charges is input tax. HMRC will accept this is the case where a business has imposed clear rules prohibiting private use and enforces them. But HMRC realises that in practice businesses with such a policy often tolerate a small amount of private calls. HMRC is prepared to treat such minimal use as being insignificant for VAT purposes and it will not prevent a business treating all the tax it incurs on calls as input tax. Charges for private calls - If a business charges its employees for any private calls they make, then it may treat the VAT incurred on the calls as input tax, but must account for output tax on the amounts it charges. Free private calls - I f a business allows its employees to make private calls without charge, then it must apportion the VAT incurred on the call charges. It is not appropriate for businesses to adopt an alternative treatment of accounting for output tax on the private use. Fixed monthly charges - Where the phone package allows the business to make a certain quantity of calls for a fixed monthly payment and there’s no separate standing charge, then it must apportion the VAT on the total charge for the package. Similarly, where the contract is for the purchase of the phone and the advance purchase of a set amount of call time for a single charge, the apportionment will also apply to the whole charge. Contains public sector information licensed under the Open Government Licence v3.0 Employee Expenses & VAT

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

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.

VAT Guide for Argentina. Including VAT Rates, Goods and Services subject to VAT including imports and Exports etc. Argentina-VAT Proposed VAT Reform - May 2025 The Government of Argentina is aiming to simplify the tax system by placing more power for levying taxes within the provinces. This includes a proposed "Super VAT" whereby the current VAT rate would be split between the federal Government (9%) and the provinces would be allowed to set their own rates between the 9% federal Gov't rate up to the 21% rate. Current VAT The current general rate of VAT in Argentina is 21% and is applied on the sales value of products and services (including professional services), with a few specific exceptions. This tax is applicable to imports of goods and services (services rendered abroad and used or exploited in Argentina). The tax paid on imports can be taken as VAT credit. Certain goods are taxed at a reduced rate of 10.5%, for example, works on real estate for housing, services related to agriculture, operations of certain capital goods and food. Beside, some services taxed at 27%, for example, gas, energy and telephone services. Reverse Charge VAT As a result of the 2017 tax reform, VAT legislation currently includes ‘digital transactions' (e.g. digital services, hosting, on-line technical support, software services, Internet services) provided from abroad as a taxable event. Hence, these types of services are now subject to VAT at a 21% rate if they are provided by a non-resident entity to an Argentine final customer, on condition that they are actually used in Argentina. Exports of goods and services (services rendered in Argentina and used or exploited abroad) are taxed at 0%, which implies that input VAT (VAT credit on purchases of goods and services) related to exports may either be used as a credit against output VAT or refunded pursuant to a special procedure. VAT paid on purchases, final imports and rental of automobiles, not considered as inventory, may not be computed by the purchaser as a credit. The same tax treatment applies to other services, such as those provided by restaurants, hotels and garages. The above-mentioned restrictions do not apply when the engagement of these services is for a conference, congress, convention or any other similar event directly related to the specific activity of the contracting party. Source - Argentine Tax Authority