VAT Exemptions & Refunds

VAT Exemptions - Session 01

The Fifth Schedule to the Maltese VAT Act provides for various VAT exemptions which are applicable to specific transactions/activities. The first part of the session will focus on the main VAT exemptions primarily:

• Exemptions with credit,
• Exemptions Without Credit
• Exempt Intra community Acquisitions
• Exempt importation

During the session we will discuss mainly the conditions/criteria which need to be satisfied in order for such exemptions to apply including the effect on the right of refund too. The importance is primarily two-fold; on one side one needs to ensure that the exemptions are only applied when all the applicable conditions are satisfied, hence avoiding under declaring any output VAT (with the respective implications of penalties and interest). On the other hand it is equally important to be aware of the applicability of the exemptions, which if not identified in a timely manner might lead to the un-necessary imposition of VAT when not essentially required, hence potentially leading to over-charging on certain supplies with the respective implications on competitiveness.

VAT Refunds - Session 02

VAT Refunds often gives rise to several issues including:

• Eligibility of Input Tax Credit (Who is entitled to claim back input VAT)
• Evidence of Input Tax (Type of Documentation required – full vs simplified invoices, receipts?)
• Blocked Deductions (Which VAT can never be claimed back)
• Attribution of input Tax and Partial Attribution (In which instances is the right of refund restricted and how to calculate it)
• Capital Goods Scheme (When are adjustments to past input VAT incurred required)
• Reductions/Credit Notes/Late invoices (how to declare them in the VAT Return and whether there is the need to adjust past VAT Returns and if yes how)

During the second part of the session we will discuss the main VAT provisions pertaining to VAT refund with an emphasis on the issues above. This part is intended to assist attendees to continue developing and improving their knowledge as to determining which VAT can be claimed back and why, with a view to ensuring as much as possible that any VAT that can be claimed back is actually claimed back in the proper manner, whilst ensuring that one does not overstate the amount of VAT to be claimed so as to avoid incurring penalties and interest triggered by the overstatement of input VAT.

Reference to specific situations/ examples which will be continuously made throughout the session in a user-friendly manner whilst encouraging questions from the attendees to make the session as relevant as possible.

The Speaker

Saviour Bezzina is the manager responsible for indirect tax matters at the EY Malta office and forms part of EY’s Global Indirect Tax Network as a local knowledge contact. He joined EY in July 2006 after obtaining the Bachelor of Accountancy (Hons.) from the University of Malta. He is a member of the Malta Institute of Accountants, holds a Diploma in VAT compliance and lectures regularly on VAT and indirect tax matters. Saviour was awarded the 2007 MIA prize as the best student who graduated in the Bachelor of Accountancy (Hons) Degree Course Group 2004/2006.