Published 15 December 2023
Basseterre
Buckie Got It Media Source
Discounted VAT Rate Days Business Guidance
INTRODUCTION
This information provides guidance on the conditions for participation and the reporting requirement for the Discounted VAT Rate Days (DVRDs) December 15 and 16, 2023. Approved businesses will be allowed to charge VAT at the rate of 5% on the sale of goods inclusive of vehicles.
Which Businesses are Eligible?
All VAT Registered businesses that have filed ALL Returns and have NO outstanding fees, licences, tax liabilities, penalties or interest due to the IRD or CED prior to DVR Day, may qualifyto participate in the DVR Day. If you do not have any outstanding returns or liability, you may
complete the Application Form and submit it to the Inland Revenue Department by 3:00 pm on or before December 11, 2023. The Department will indicate the status of your application in writing. If a business filed a VAT objection, eligibility is dependent on satisfying the conditions of that objection which includes submitting 50% of the tax in dispute Items Eligible
Tangible items that are presently subject to 17% VAT will qualify for the discounted
VAT Rate
on the DVR Days. However, in relation to vehicle purchases, VAT will be exempt on the first
$50,000 only. Any cost in excess of the $50,000 will attract the usual 17% VAT.
Persons
receiving Duty Free concession on a vehicle will NOT be eligible for the DVR
Day VAT
exemption on the first $50,000. Hence, persons receiving Duty Free concession on vehicles will be required to pay the standard rate of 17% VAT upon purchasing a vehicle at Duty Free on the
DVR Days.
Non– tangible items such as the supply of professional services will continue to be subject to the 17% VAT rate. Services such as legal fees, restaurant supplies, rent, tickets for the game of chance (lottery/raffles), top-ups and phone cards are NOT eligible for the reduced rate. Items eligible
MUST also be available for sale and immediately available for issuance or delivery to the customer
on the DVR Days. Orders for items not in stock DO NOT qualify.
Guns, Ammunition, Cigarettes and alcoholic beverages are NOT eligible.
Alcoholic Beverages NOT eligible include but are not limited to Wine, Brandy, Vodka, Whiskey,Gin, Rum, Liqueurs, cordials, Beer, Guinness, Royal Stout, Shandy Carib and Smirnoff Ice.
Are Items sold on Credit and Hire Purchase eligible for the reduced rate?
YES! Eligible goods sold under a credit or hire purchase agreement will qualify for the reduced rate of 5% if the sale is concluded on the DVR Days. Businesses are reminded that the VAT on the sales under credit terms must be reported in its entirety whether or not payment has been made in full during that tax period.
Rules governing returns and exchanges.
If a customer buys a good at the special 5% rate during the DVR Days and exchanges it on the same day for another good, the 5% rate will still apply. The special rate will NOT apply if the
exchange is done after December 16, 2023.
If a customer buys a good on any DVR Day and returns the item after the Day for a credit on the purchase of a different item, the 17% VAT Rate would apply to the sale of the newly purchased item, even if it would have been eligible for the 5% Rate during DVR Day.
If a customer buys an item before the DVR Day but returns the item during the DVR Day and receives credit on the purchase of a different item, the reduced rate shall NOT apply on the sale of the new item.
Filing Requirements
Businesses approved to participate in the DVR Days will be required to complete and submit a “Discounted VAT Day Sales Report’ to the Inland Revenue Department on or before December 28, 2023. The required form is available at the Taxpayer Services desk at the Inland Revenue
Department. Failure to do so will attract interest and penalties.
The report should include all Sales at the Reduced Rate of 5%, the Standard Rate of 17%, Zero Rated items and/or Exempt items. The Value of Supplies at 5% and the VAT collected at 5% should be reported on lines 106 and 131 of the VAT Return respectively whereas the Value of
Supplies at 17% and the VAT collected at 17% should be reported on lines 100 and 125 of the VAT Return respectively.
Contact Information
St. Kitts
The Inland Revenue Department
P. O. Box 34, Bay Road,
Basseterre
Tel: +1-869-465-8485
Nevis
Inland Revenue Department
Main Street, Charlestown
Tel: +1-869-469-5856
Email: [email protected]
Website: www.sknird.com or visit us at www.facebook.com/sknird
“Building Our Nation Through Responsible Tax Administration”
