Assembly approves changes to Vat law |14 December 2012

Finance, Trade and Investment Minister Pierre Laporte presented the Bill to the Assembly during the last sitting for this year, yesterday.

He also proposed certain amendments to the Business Tax law.
The Vat Amendment Bill 2012 seeks to amend sections 2, 13, 15, 33, 35 and 37 of the original Vat law to provide among other things for the:

• introduction of ‘capital goods’ and ‘minor operating equipment’. In his presentation Minister Laporte explained that capital goods are goods related mainly to investment while the latter mainly concerns equipment necessary for business operations. 

Minister Laporte explained that it is important to differentiate between the two definitions in view of the different treatment when businesses pay tax:

• input of tax initially deducted for unused goods or goods disposed of to be remitted to the revenue commissioner

• time of payment or part payment for goods or services,
• refund where the total input tax exceeds the total output tax for any Vat period.

With regard to the amendments to the Business Tax law, Minister Laporte explained that they are aimed at ensuring that all the necessary structures, legal frameworks and all aspects of the investment climate are in line with international standards to encourage more investments and also guarantee legal protection for our economy against potential abuses.

Amendments being proposed concern sections 2, 11(1)(b), 14, 39, and 78 to provide for among other things the:

• differentiation between royalty and technical services fees,
• inclusion of technical services fee as an assessable income of a resident person,
• widening the liability of partnerships.
After its sitting yesterday the National Assembly has now gone into recess until next year.