This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious


Close

Password Reminder

Please enter your email address to receive a password reminder.

 

Log into Tax-News+
Not registered yet? Find out about our daily news alert service »

Email Address: 
Password: 

Login »

Forgotten your password?


Today’s Top Headlines




Bahamas Clarifies VAT On Existing Contracts

by Mike Godfrey, Tax-News.com, Washington

15 September 2014

The Bahamas Government has clarified that taxable supplies provided under a contract to a recipient after the introduction of value-added tax will be subject to tax.

For supplies after the entry into force of the VAT Act from January 1, 2015, VAT-registered persons may recover VAT from the recipient of a taxable supply under an existing contract, regardless of whether that contract included provisions concerning VAT liability.

This is provided for under subsection 1 of section 98 of the VAT Act, which states that "a supplier may, where a contract was concluded before the entry into force of this Act and no provision relating to tax was made in such contract; and where the supplier after the entry into force of this Act becomes a registrant and makes taxable supplies under the contract, recover from the recipient of a taxable supply made after the entry into force of this Act the tax due on the supply."

The Government stated: "For the sake of greater clarity in respect of this matter, the Ministry of Finance wishes to reiterate that [issues relating to the payment of VAT on existing contracts] are subject to the legal provisions contained in the VAT Act itself. As is made clear in each of the Guidance Notes, these are provided to the public as general overviews on specific areas of the legislation; as such, they have no legal bearing and interested parties are referred to the VAT law for definitive legal interpretations."

Contracts that are already in force and continue into 2015 will not have to be rewritten, even though suppliers will have to account for VAT on such revenues. VAT will have to be assessed on the portion of supplies made on or after January 1, 2015. If the contracts do not already make provision for VAT, the law empowers suppliers to charge VAT through section 98 subsection 1.

The Government further pointed out that the transitional provision in section 98 subsection 3 of the Act also makes clear that the contract price included in a contract concluded after the date the Act comes into force will be deemed to include VAT, and a taxable person who makes taxable supplies under such a contract must pay and account for output tax chargeable on the supply.

TAGS: compliance | Finance | VAT tax authority guidance | tax | value added tax (VAT) | Bahamas | law | tax authority | legislation | services | VAT compliance matters

To see today's news, click here.

Leave a comment

Read our Posting Guidelines