Guarantee for VAT

VAT guarantee postponed

The General Financial Directorate (“GFD”) published information on the Financial Administration’s website that for the time being it would not call upon taxable supply recipients to pay VAT that remained unpaid because the provider made the payment to a bank account that was not published in the relevant register. After 1 January 2014, tax administrators will address taxpayers for which the guarantee will be prescribed by law on the grounds mentioned above.

Originally, the guarantee was to be applied as of 1 April 2013.

The information above does not apply to other grounds for a guarantee and taxable supply recipients must still be cautious in that respect.

Guarantee for VAT - Payments in special cases

The GDF published information on the Financial Administration‘s website that concerns certain situations in which it is not possible to fulfill the legal condition of paying consideration for a taxable supply to the taxable supply provider’s account published properly by the tax administrator. Such cases include situations in which the taxable supply provider uses services of factoring companies or other receivable administrators or collectors or situations in which the payment for the supply is provided indirectly via a notary’s or attorney’s escrow or paid to an escrow account.

The GFD’s information also includes the conditions under which the guarantee will not be applied in the above-mentioned cases. The main condition is demonstrable documentation of the entire history of the payment of the taxable supply in question, i.e. from the taxable supply recipient via a third party to the published taxable supply provider’s account.

The GFD’s information also contains the conditions under which tax administrators will not apply a guarantee for outstanding VAT in the case of payments by payment card, payments in executor proceedings and insolvency and in the cases of associations and groups for VAT purposes.