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The amendment to the VAT Act changes, among other, the procedure for applying VAT on shortages, damages, losses or thefts of business assets. In case of undocumented shortages, damages, losses or thefts of business assets, the VAT Act introduces the duty to settle the entitlement to input VAT deduction originally claimed. The adjustment shall be made within the period in which the taxpayer discovered such circumstances or could discover them, for example through goods inventory. The time period for which such adjustments are required is 3 years with respect to inventories and low-value assets and 5 (10 respectively) years with respect to fixed assets.
We would like to stress that if shortages and damages are supported with proper documentation (e.g. natural shortages), the treatment remains the same regardless the amendment to VAT Act, i.e. there is no need to adjust the originally claimed VAT deduction.
In case your company performed goods inventory in July, it is obliged to settle the originally claimed VAT deduction upon purchased goods / material within the July VAT return which is to be filed by August 25, 2017.
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Accace is a proactive consultancy and outsourcing partner who bridges the gap between needs and solutions. Combining smart and streamlined technology with a holistic approach, we provide an all-round care to clients and consider their matters as our own. With over 800 experts and more than 2,000 customers, we have vast experience with facilitating the smooth operation and growth of small to large-scale, global businesses.
About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 50 jurisdictions with nearly 2,500 professionals, we support more than 15,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 200,000 pay slips globally.
