ʀᴇᴠᴇʀꜱᴇ ᴄʜᴀʀɢᴇ ᴛᴀxᴀʙɪʟɪᴛy ᴀɴᴅ ᴠᴀᴛ ʀᴇɢɪꜱᴛʀᴀᴛɪᴏɴꜱ

Following up on reverse charge from the last post (Read here : https://lnkd.in/gfJxjQX9)

𝑹𝒆𝒗𝒆𝒓𝒔𝒆 𝒄𝒉𝒂𝒓𝒈𝒆 𝒎𝒆𝒄𝒉𝒂𝒏𝒊𝒔𝒎 𝒔𝒉𝒊𝒇𝒕𝒔 𝒕𝒉𝒆 𝒕𝒂𝒙 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒚 𝒇𝒓𝒐𝒎 𝒕𝒉𝒆 𝒔𝒆𝒍𝒍𝒆𝒓 𝒕𝒐 𝒓𝒆𝒄𝒆𝒊𝒗𝒆𝒓.
Seller would issue a zero tax invoice if the transaction falls under reverse charge. So the 𝐕𝐀𝐓 𝐫𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐫𝐞𝐜𝐞𝐢𝐯𝐞𝐫 𝐰𝐨𝐮𝐥𝐝 𝐦𝐚𝐭𝐭𝐞𝐫 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 in tax determination. If the buyer is not registered for VAT, Reverse charge won't be applicable.

𝑯𝒆𝒓𝒆 𝒂𝒓𝒆 𝒕𝒉𝒆 𝒔𝒄𝒆𝒏𝒂𝒓𝒊𝒐𝒔,

  1. Buyer and Seller VAT registered in their countries. - 𝙍𝙚𝙫𝙚𝙧𝙨𝙚 𝙘𝙝𝙖𝙧𝙜𝙚 𝙞𝙨 𝙖𝙥𝙥𝙡𝙞𝙘𝙖𝙗𝙡𝙚.
  2. Buyer is not registered and Seller is VAT registered - Reverse charge is not applicable.
  3. Buyer is VAT registered and Seller is not- 𝙍𝙚𝙫𝙚𝙧𝙨𝙚 𝙘𝙝𝙖𝙧𝙜𝙚 𝙞𝙨 𝙖𝙥𝙥𝙡𝙞𝙘𝙖𝙗𝙡𝙚.
  4. Buyer and Seller not VAT registered - Reverse charge is not applicable.


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#tax #Reversecharge #indirecttax #vatregistration #sabrix #onesourceindirecttax

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