Online Taxes & VAT Advanced

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Online Taxes & VAT Advanced

1. What are the general rules on VAT and GST?

The ultimate purpose of VAT/GST is to impose a broad-based tax on final consumption by households. Typically, VAT/GST is collected through a staged process. That means that each business in the supply chain charges VAT/GST to its customer, regardless of whether the customer is a private individual or a business.
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2. What are the differences between goods and services in terms of VAT and GST?

Generally speaking, the taxable events for VAT/GST are supplies of goods and supplies of services. As a condition to subjecting goods and/or services to VAT/GST it is normally required that they are supplied by persons identified as taxpayers (‘taxable persons’) and that are made for consideration.
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3. What are the most important rules and aspects regarding imports of goods?

When importing goods in a VAT/GST jurisdiction from a country outside that jurisdiction, in principle customs duties and VAT/GST on importation are due. Within a Customs Union, the countries that form part of that Union generally do not levy customs duties on goods imported from other countries within that same Union.
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4. What are the most important rules and aspects regarding services (inbound and outbound)?

Globally, most of the rules currently in force are generally intended to tax supplies of goods, services and intangibles within the jurisdiction where consumption takes place.
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5. Who should pay VAT or GST?

In principle, the supplier of a good or service is required to pay the VAT it charged to and received from its customer to the competent tax authorities.
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6. What are thresholds and how are they determined?

VAT/GST thresholds are manifold. They differ substantially per jurisdiction, and apply in different situations.
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7. What deductions should be taken into account?

In all VAT/GST systems, the general idea is to relieve businesses from the burden of VAT/GST. Therefore, they can in principle recover the VAT/GST charged to them on their purchases. However, exceptions may exist. In particular when businesses make VAT/GST exempt supplies, it may occur that there is insofar no right of recovery of the VAT/GST on the purchases.
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8. How are tax rates generally determined?

VAT/GST rates are different in each country and are also different per type of good or service. Therefore, the VAT/GST applicable must always be determined on a case-by-case basis.
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Bertjan Janzen
Tax Partner
Tim Kok
Senior Manager Indirect Taxes
Ad van Doesum
VAT Adviser / Professor
PwC / Universiteit Maastricht

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