Persons who have businesses that are currently making gross sales of $120,000 per year or $10,000 per month are required to register for VAT according to the Value Added Tax Act of St.Vincent and the Grenadines. This requirement is a mandatory one for all businesses and service providers who would meet the threshold. Persons who are required to register includes sole traders, partnerships, companies, unincorporated entities and service providers such as Lawyers, Accountants, Contractors, Plumbers and Hairdressers, to name a few.
Registered persons therefore have the responsibility to charge and collect VAT, and thus act as agents for the government. Registered taxpayers have no later than fifteen (15) calendar days after the tax period (which is one month) to file their VAT return. For example, Return for the month of May 2007, would be due on June 15th 2007.
We are encouraging all businesses and service providers to keep their necessary VAT documents up to date at all times, in order to make the VAT return filing process simple. These documents include VAT invoices, sales receipt, purchases and sales journals. The use of these documents make the filing of the VAT Return an easier procedure, hence completion would be done in a manageable time.
Each VAT registered taxpayer must submit a Return monthly. It is mandatory for businesses and service providers to submit a return even if there were no transactions for the month, or the taxpayer would be classified as a non- filer. It is also important to note that months cannot be skipped then merge into one VAT month while filing Returns, since the computer would not be able to differentiate between the actual month being paid for, and the consolidated months. Moreover, doing so would also allow the administrators to perform their duties efficiently and effectively. Businesses and service providers can file their Return through the mail, place it in the drop box or present it to a cashier at the Inland Revenue Department.
If a registered person input tax (VAT paid on purchases) exceeds his output tax (VAT collected from sales) then he is entitled to claim a refund. It is important to note that you cannot claim a refund if it is less than $100 but would be carried forward to the following month.
If the credit is carried forward for three consecutive months, then in the fourth month he is entitled to his refund. If the department fails to pay the refund, then interest will be due on the amount at the current market rate. However, if you are an exporter with export sales of over 50% of your total sales you can apply for your refund when you file your VAT Return. This is to encourage competitiveness on the regional and international market.
According to the VAT regulations there are serious consequences for late filing of a Return. Late filers would be fined $500 or 5% of the tax due or which ever is greater.