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Format of Presentation
 VAT Rates;
 Requirements Under the Law;
 VAT Terms;
 Treatment of Certain Items;
 Operating in VAT Environment;
 Support for Business Sector;
 Transition Arrangements;
 Concessions -Imports and Exports
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VAT Rates
 Standard rate 15% - applied on all goods and services,
Reduced Rate applied to the Hotel Sector;
 Zero rated (0%) – the First Schedule of the Act refers.
Include electricity, water and petrol;
 Exempt – basic goods and services (includes education
services and supplies; medical services)
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Requirements Under the Law
 Threshold for registration is $180,000 per annum;
 Certificate of Registration must be prominently
displayed on business premises;
 Displayed prices must be VAT-inclusive;
 Monthly returns to be filed 21 calendar days following
the month for which the tax is due. Tax due must
accompany return;
 A system of invoicing is used to administer the tax,
and so there are special requirements for record
keeping.;
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Requirements Under the Law
 Record Keeping – the Law mandates that the following
records be maintained in English Language for six (6)
years:
 (Sales and Purchases) - tax invoices, receipts, tax credit notes
and tax debit notes;
 Customs documentation relating to imports and exports;
 Accounting records relating to taxable activities carried on in
Saint Lucia;
 Other business records.
Penalties are applicable for failing to maintain proper records.
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Requirements Under the Law
 Only VAT Registered businesses can:
 Charge and collect VAT;
 Issue tax invoices to other registered taxpayers;
 Reclaim Input VAT;
 Be referred to as taxable persons (tax payers).
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VAT Terms
Supply: a supply could be of a good or service;
Supplies of goods = sales, leases, licences, options etc for
tangible property (including commercial real estate);
Supplies of services = any supply that isn’t a supply of goods
is a supply of services. Services industries (lawyers,
accountants, plumbers). Supplies of rights, e.g.
copyrights, telephone cards, pre-paid vouchers,
restrictive covenants
All supplies are either supplies of goods or supplies of
services.
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VAT Terms
Exempt Supplies - No VAT is charged on supplies. Registered
businesses cannot claim VAT paid on inputs.
Zero Rated Supplies - No VAT is charged (i.e. 0 percent).
Registered businesses can claim for VAT paid on inputs.
Input VAT - The VAT registered businesses will pay on the
value of imports; and the value of goods and services
acquired from other registered businesses.
Output VAT - The VAT a registered business will charge
customers on goods and services supplied.
Tax period – a calendar month
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VAT Terms
Taxable Activity
Any activity carried out on a regular or continuous basis &
involving the supply of taxable goods or services whether or
not for profit, for consideration;
Does not include: hobbies & private activities,
employment, Government activities that don’t
involve supplying goods or services to the public
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Treatment of Certain Items
 Already existing stock: No credit for consumption tax

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
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already paid. Agreed will cause a price spike and will
address this in Public Education;
Entertainment-Expense incurred: Input Vat nonreclaimable;
Capital Goods: taxable – input VAT reclaimable;
Exempt where productive activity has not commenced;
Commercial rent: taxable at 15%;
Passenger Vehicles: no input tax deduction allowed for
the purchase or importation unless the business is
dealing in or hiring of vehicles and the vehicle was
acquired for the purpose of such business
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Treatment of Certain Items

Contracts – where concluded before the commencement
of the VAT Act and no provision is made for the tax, the
supplier is to recover the tax due from recipient of any
supplies made under the contract after the Act comes into
operation. For contracts concluded after the
commencement of the Act, the contract price is deemed to
be VAT inclusive and the supplier must account for the tax.
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Treatment of Certain Items
Refunds
 A carry forward of excess tax credits for a 3 month
period
 The application of credits to future payments
 The refund of any credits existing after 3 months
 The payment of interest if not refunded promptly
To achieve this a portion of the VAT collected at
Customs will be set aside in accordance with the
Finance (Administration) Act, Cap 15.01
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Operating in a VAT Environment
 During the course of a registered business’ operations
it will pay VAT on its taxable inputs (local purchases
and imports) and charge VAT on its taxable sales. The
VAT payable to the IRD for the tax period is calculated
as:
Output VAT- Input VAT= Net tax remitted to IRD
If the net tax is a refund the Bill provides for the carry
forward of the refund for a period of three month during
which it is treated as input tax deduction (available for
setoff against output VAT Due)
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Operating in a VAT Environment
 Payment: VAT is due and payable within 21 calendar days
after the end of the tax period. Payment for VAT charged on
imports due and payable at the time of Importation.
Penalties and interest are applicable for failure to pay.
 VAT Returns: must be filed within 21 calendar days after
the end of the tax period whether or not tax is payable for
the period. Penalties are applicable for failure to file.
 The Bill provides for –
 Assessments;
 Objections and Appeals
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Operating in a VAT Environment
Forms:
 Application for Registration;
 Change of Registration Details
 Disclosure of Errors in VAT Return filed
 Application for De-registration;
 Monthly Remittance Forms;
 Notice of Claim for Refunds
 Objections
 VAT Return
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Support for the Business Sector
Sector Specific Engagements
 Initially to cover 10 (ten Sector) with 3-4 hour
presentations;
 Some sectors and business groupings already identified
and some dates already confirmed;
Advisory and Registration Exercise
 To commence before Sept 1 and continue beyond;
 Intention to visit, register and advise every business even
past September 1;
 The advisory entails one-one discussion with accounting
personnel and business owners.
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Support for the Business Sector
 Outline For the Presentations
 General VAT principles (pricing, operating in the VAT
environment);
 Charging VAT (Taxable supplies; identifying time and
place of supply; value of supply);
 Accounting for VAT
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Support for the Business Sector
Small Business Sector Support
The Ministry of Commerce through SEDU will be providing support to
small business training.
The goal of the project is to prepare the Medium, Small and Micro
Enterprise Sector to transition into the VAT era.
The Package is made up of:
 Training on VAT and general business procedures;
 Regularizing business status (registration with IRD, NIS, Business
Name);
 Software package;
 Training available free of charge for businesses registered by September
1, 2012.
 Training to commence in July 2012
.
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Transitional Arrangements
Transitional Provisions and Procedures
 Free storage at seaports for registered businesses
only. Available from July 1 to September 30, 2012
 Partial clearance allowed
 SLASPA support confirmed
 CED response confirmed
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VAT & Customs
 How it works
 Transitional Provisions and Procedures
 Export of goods
 Effect of VAT on Concessions
 Preparedness of Customs & Excise Department
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VAT & Customs
How it works
 Replaces Consumption Tax and Environmental
Protection Levy
 Payable on clearance for home consumption
 Payable on compounded value – last tax
 Preparedness of Customs & Excise Department
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CED Transitional Policies
Taxpayers will have the following options:
 Free storage at the seaports for a three month period
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July 1 – Sept 30, 2012
CED and SLASPA preparedness and partial clearance
 Conversion of existing storage facilities to bonded
warehouses (this will be done on a case by case basis)
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CED role re application, approval, security and operation
DCA and Fire Department role re approvals
 Agreed procedures manuals to be circulated
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VAT & Exports
Export are always zero rated
 Manufacturers
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Notification of intent to export
Verification of goods
Certificate of shipment
 Registered businesses
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To adopt similar procedures
 CED to oversee these activities
 Agreed procedures manual to be circulated
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VAT & Concessions
 On Imports
 Fiscal Incentives - prior to commencement of activity
 Disaster threat or response (NEMO approval)
 Personal effects and returning nationals effects
 Unconditional gift to state or charity
 Diplomats, Charities, and International organisations
 On Domestic purchases
 Refund system is used
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Customs Preparedness
 Logistics
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Staffing assignments
Training of officers brokers, and shippers
Publication of confirmed procedures
 Import transactions
 ASYCUDA World
 Tariff and other tables preparation
 Budget head activation
 Refund account
 Domestic transactions
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Consumption tax arrears management
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