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Vanuatu's Inland Revenue Department on November 3, 2016, released guidance on its penalties regime for non-compliance with value-added tax (VAT) law.
Under section 51(1)(a) of the VAT Act, where a person fails to apply for VAT registration, a fine of up to VUV100,000 (USD910) applies. For a second case of non-compliance, a fine of up to VUV200,000 will apply, with more severe penalties for persistent non-compliance.
Under section 51(1)(b), an offense is committed when a person refuses or fails to furnish any return or information as and when required by the VAT Act or by the Director. For example, the due date for filing a VAT return is usually the 27th day of the month following the end of the taxable period. It is therefore an offense if a return is not filed by the due date. The guidance states that it is a strict liability offense – that is, it need not be done knowingly.
On the first occasion on which a person is convicted of any such offense (or offenses), the person becomes liable to a fine of up to VUV40,000 for each offense, for each month of the default. The maximum fine is increased to VUV70,000 for each month of the default. For any subsequent offenses, the Office will proceed with prosecution actions.
Under section 51(1)(c), where a person: makes any false return; makes any false statement; makes any false declaration; or gives any false information, and knew it was false or did not carry out appropriate due diligence to satisfy themselves that the information disclosed was correct, this is an offense subject to penalties.
On the first occasion on which a person is convicted of any such offense (or offenses) the person becomes liable to a fine of up to VUV100,000. Upon a second conviction the fine is increased to VUV200,000. For any subsequent offense, the Office will proceed with prosecution.
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