Are you ready for changes in the VAT ledger statement?
With the recent amendment to the VAT Act, the revised Instruction on Completing the VAT Ledger Statement entered into effect on 1 April 2019. Its most significant changes concern corrections to the tax base for irrecoverable debt. What to watch out for when stating these corrections in the VAT ledger statements?
First, please note that new Section 46 of the VAT Act shall be applied if all facts relevant for the correction occurred after the effective date of the amended act, i.e. after 1 April 2019.
In the present XML structure of the VAT ledger statement valid until 30 September 2019, the creditor/debtor shall check the corrections in respect of irrecoverable debt field in the VAT ledger statement line in the respective section (A4/B2); this field has been pre-set as blank. Then, they have to specify whether it is a correction to a tax base under Section 44 of the VAT Act in its wording before 31 March 2019, or a correction under Section 46 of the VAT Act as amended after 1 April 2019. The tax administrator will only know which correction this is from the information stated in the respective line: for corrections under Section 44, only the amount of tax shall be corrected; for corrections under Section 46, the amounts in the tax field and the tax base have to be corrected.
The XML structure of the VAT ledger statement is to change further from 1 October 2019. The corrections in respect of irrecoverable debt field will contain the following values, depending on the corrections made:
- N – not a correction for irrecoverable debt,
- P – a correction at the creditor’s under Section 46 et seq. or at the debtor’s under Section 74a of the VAT Act,
- A – a correction under Section 44 of the VAT Act in the wording before 31 March 2019.
If the creditor/debtor enters P in this field, then the amounts of the correction to the tax base and the correction to the related tax shall be stated in the VAT ledger statement line. If they enter A, only the amount of the tax correction shall be stated; the tax correction field shall in this case remain inaccessible. We recommend reviewing your system’s readiness for these changes.