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A new rate of 15% Value Added Tax is now effective in Vanuatu.
The rate was increased from 12.5% from Monday, 1 January 2018.
The change is the result of the recent amendment to the Value Added Tax legislation by Parliament and it was published in Government’s Official Gazette on 22 December, 2017.
The VAT Office has instructed all retailers to put up a notice between January 1 and 21 next year in their shops to let customers know that an adjustment may be made at the till (cash register) to account for VAT at the new rate.
“The simplest way to increase your VAT inclusive prices to reflect the increase (2.5%) in the VAT rate to 15%, just multiply your old price by 115/112.5.”
Business houses have also been advised in a summary of how the rate change will impact business.
“Businesses registered for VAT on a payments basis; Payments received or made on or after 1 January 2018 for invoices issued on or after 1 January 2018 will attract the new rate of 15%,” it stated.
“Payments received or made for invoices issued before 1 January 2018 will remain at 12.5%. However, an adjustment will be required on your VAT return to correctly account for it.
“For Businesses registered for VAT on an invoice basis; If the invoice was issued before 1 January 2018, the old rate of 12.5% applies (and will be included in that period’s VAT return).”
If the invoice is issued after January 1, 2018, the new rate of 15% applies.
The statement reiterated that clients are reminded that the next two VAT returns that are due on January 5 and January 27 2018 relate to the period’s November and December 2017 respectively, and therefore the old rate of 12.5% still applies when calculating VAT payable/refundable.
