VALUE ADDED TAX



VAT Rise Sparks Fear of Recovery

VAT Rise Sparks Fear of Recovery

Introduction

The duty of restoring VAT arises in a tax period prior to transfer to USN * (1). That is, if the organisation begins to apply the "simplified taxation" since 2010, the VAT should be recovered and reflected in the declaration for the IV quarter of 2009.

To recover VAT on all goods, works, services and property rights, which will be used even for the simplified system, and for which input VAT was passed to the residue. You must analyse the remnants of January 1, from which the organisation begins to apply the USN, the accounts of accounting: 10 "Materials", 41 "Goods", 01 "Fixed Assets", 04 "IA", etc. * (2) to determine , whether any of these goods, works, services and property rights to deduct VAT.

Thus, if the organisation was exempt from VAT tax obligations pursuant to article 145 of the Tax Code or exercised exclusively exempt from VAT the activities, the VAT deduction is not taken. And hence, there is nothing to restore. If the taxpayer has led the taxable activities and to take the VAT deducted, you need to figure out exactly what amount of tax had previously been lawfully adopted by the deduction.

Paragraph 3 of Article 170 of the Tax Code reads as follows: for goods, works, services and property rights restored in the amount of VAT tax, previously accepted for deduction in respect of fixed assets and intangible assets - in the amount proportional to the residual (book) value excluding revaluation .

Discussion

Just think of the consequences of a failed operation to raise awareness of the problem. With a failed operation not only lose the ability to collect product or service and return on investment, but it also pays VAT to the tax paying customer and our income tax accordingly.

The VAT Law 37/1992 gives legal cover to the employer or professional in order to lessen the negative effects of default. Art. 80 of the Act and 24 of its regulations establish the circumstances and conditions for modification of the tax base. Art. 80 has suffered a series of reforms that have led to the current wording, much more favorable for the entrepreneur and the professional:

1) The first reform was introduced by Law 66/1997 of budgets for 1998. In its preamble stated that "... the action taken mainly addressing the promotion of business competitiveness. It is possible to change the tax base in cases of possible recovery of uncollected tax charged by compliance with certain requirements ...".

2) The second was introduced by Law 62/2003 of budgets for 2004. On the one hand, this law fits the VAT law to the terms of the Insolvency Act 22/2003, of July 9, whose approval means the disappearance of the bankruptcy proceedings and suspension of payments and its replacement by the competition procedure creditors and, secondly, Law 62/2003 extended the cases to recover the VAT. (Previously it was necessary that the defaulter was a trader or professional, while from January 1, 2004 ...