VAT Terminology

  • De Minimis: an arrangement where normally irrecoverable Input Tax relating to exempt supplies can be recovered, subject to certain limits

  • Input Tax: the VAT paid on purchases

  • Output Tax: the VAT charged on sales

  • Partial Exemption: an apportionment of Input Tax between exempt and VAT-able supplies

  • Place of Supply: the country in which a supply of goods or services must be accounted for VAT purposes

  • Residual VAT: VAT incurred on purchases for use in making different types of supplies (e.g. business, non-business, standard rated, exempt)

  • Reverse Charge: VAT arising when purchasing goods or services from another country

  • Supply: selling or otherwise providing goods or services

  • Supply of Goods: when exclusive ownership of goods passes from one person to another

  • Taxable Supplies: all goods and services sold or otherwise supplied by a taxable person which are liable to VAT at the standard, reduced or zero rate

  • Taxable Turnover: the total value – excluding VAT – of the taxable supplies made

  • Tax Period: the period of time covered by the VAT Return, usually quarterly

  • Tax Point: the date when VAT has to be accounted for – for goods, this is usually when goods are delivered or taken away, for services, this is usually when the service is performed

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