The preparatory actions of the 2017 budget have started including consultations on the draft amendments to the tax laws. Herewith, main amendments to the Value Added Tax (VAT) Law will be briefly outlined. The project will be further discussed in the Parliament and after adoption it will come into force on 1 January 2017.
The taxable periods and submission of tax return declarations upon tax State Revenue Service (SRS) authorities request. According to the draft amendments of VAT Law, semi-annual tax period is not provided. The taxation period of newly registered VAT payers is one calendar month which will be valid for six months on condition that the criteria laid down in paragraph 1 of the Article 115 of the VAT Act are not fulfilled regarding submission of monthly tax return declaration. Further, VAT payers will have to change the tax period to quarterly basis in accordance with the procedure set by the law.
The project provides SRS the right to request submission of a tax declaration in another time, however, not more than once per calendar month and not once during the tax period as it is now. SRS is planning to prepare information materials for this provision.
Deduction of input tax. The amendments provide that input tax on goods or services received from the amount of VAT due of the state budget to be deducted during the tax period when the goods or services are received and VAT invoice or payment for supply of goods or services are paid prior receipt of the goods or services but no later than next tax period that follows the current one. Consequently, the duration when the tax payer may declare input tax is extended allowing to reduce the number of corrections to the declaration that may save accountants time.
Adjustments of input tax in case of loss of bad debts and other amendments. The draft amendment specifies rules for VAT adjustments for bad debts by laying down cases that meet the condition for the bad debt incurred during the last three tax years, special VAT application scheme for farmers, application of VAT on the import of goods, reduced refundable threshold of VAT overpayment and other editorial clarifications.
VAT reverse charge procedure for sale of precious metals. In order to reduce fraud and tax evasion it is planned to introduce special arrangements for raw precious metals, their alloys and precious clad metal supplies with the next year.
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