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Value Added Tax (VAT) Act 2012 - irdstlucia.gov.lc

1No. ] Value Added Tax Act [ NOTEVALUE Added TAX BILLA. General Policy Statement1. The Bill for consideration is the Value Added Tax The purpose of this Bill is to provide for the imposition andcollection of Value Added tax on the supply of goods andservices in Saint Lucia and the importation of goods andservices into Saint The current tax system in Saint Lucia is comprised of directand indirect taxes. The Inland Revenue and Customs andExcise Departments are responsible for collecting the majorityof these Direct taxes are imposed on income and property. Thesetaxes are personal income tax, corporate income tax,withholding tax and property Indirect taxes, such as import duty, consumption tax andhotel accommodation tax, are levied on international tradeand the consumption of goods and The existing system of administering and collecting indirecttaxes is inefficient for the following reasons:(a) the system comprises numerous taxes, governed bydifferent pieces of legislation, making it administrativelyburdensome;(b) the taxes are applicable mainly

2 No. ] Value Added Tax Act [ 2012. 7. Value Added Tax or (VAT) is a tax on consumption. It is charged on the value of imports and on the value added (mark-up) on goods and services supplied by one

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Transcription of Value Added Tax (VAT) Act 2012 - irdstlucia.gov.lc

1 1No. ] Value Added Tax Act [ NOTEVALUE Added TAX BILLA. General Policy Statement1. The Bill for consideration is the Value Added Tax The purpose of this Bill is to provide for the imposition andcollection of Value Added tax on the supply of goods andservices in Saint Lucia and the importation of goods andservices into Saint The current tax system in Saint Lucia is comprised of directand indirect taxes. The Inland Revenue and Customs andExcise Departments are responsible for collecting the majorityof these Direct taxes are imposed on income and property. Thesetaxes are personal income tax, corporate income tax,withholding tax and property Indirect taxes, such as import duty, consumption tax andhotel accommodation tax, are levied on international tradeand the consumption of goods and The existing system of administering and collecting indirecttaxes is inefficient for the following reasons:(a) the system comprises numerous taxes, governed bydifferent pieces of legislation, making it administrativelyburdensome;(b) the taxes are applicable mainly to goods, narrow basesfor import and manufacturing sectors, therefore limitingthe tax base, and applying relatively high tax rates so asto generate a desired level of revenue.

2 (c) indirect taxes are levied at multiple rates presenting anadditional administrative burden which could result ina system which is cumbersome to businesses;(d) the cost of administering the taxes is ] Value Added Tax Act [ Added Tax or (VAT) is a tax on consumption. It ischarged on the Value of imports and on the Value Added (mark-up) on goods and services supplied by onebusiness to another or to final consumers. It is not a taxon output neither is it a tax on is designed to ensure that all forms of consumerspending, with the exception of expenditure on exemptsupplies, are taxed evenly and implemented efficiently, it will ensure that the fullburden of the tax applies only on the final selling is not a tax on the producer or the supplier of goodsand VAT is intended to be collected by VAT registeredpersons who will include VAT in their prices so that it isultimately paid by the final consumer.

3 A VAT registeredperson is a producer or supplier of taxable goods andservices who exceeds a given amount of annual taxablesupplies of turnover or sales, called the thresholdrequirement for will be charged on all goods imported (except thoseexempted by legislation) whether or not the importer isa VAT registered VAT on inputs includes payments made on importsand other purchases used to make the taxable supply orsales. Under the Bill, a VAT registered person will payto the Comptroller of Inland Revenue the differencebetween VAT collected from consumers and VAT paidon acquiring business inputs (including imports whichwould have been paid to the Comptroller of Customs). Bill will repeal a number of indirect taxes such as,the consumption tax, the motor vehicle rental fee, thehotel accommodation tax, the mobile cellular telephonetax and the environmental protection levy.

4 The CommonExternal Tariff (CET) will be retained, in keeping withSaint Lucia s regional and international ] Value Added Tax Act [ as proposed will consist of a standard rate of fifteenper cent, and a rate of zero per cent for certain goodsand services. Therefore, consumers are likely toexperience a reduction in the price of many itemsespecially where the VAT would be lower than theconsumption PROVISIONS OF THE I of the Bill provides for preliminary mattersincluding the short title, commencement andinterpretation (clauses 1 and 2). Provision is made inclauses 3-6 for the construction of fair market Value ,supply, supply by agent or auction and administration of the Act is provided for in Part 2 ofthe responsibility of the Comptroller for carrying outthe provisions of the Bill and the Comptroller s power todelegate his or her powers, duties or functions imposedunder the Bill are set out in clause 7.

5 Clause 7 gives theComptroller or his or her delegate the power to withdrawor amend a decision made subject to conditions withrespect to the requirement for virtue of clause 8 of the Bill, restrictions are imposedon the disclosure by a tax officer of matters coming tohis or her knowledge or the giving of access to any personof records in his or her possession or custody except inthe exercise of powers of the tax officer or theperformance in the course of exercise of his or herfunctions under the Act or by court order. An exceptionto the restriction on disclosure is provided for where theComptroller discloses to a person and the disclosure isnecessary for the purposes of the Bill or another law inforce in Saint Lucia administered by the Comptroller orthe Comptroller of Customs or where the person isauthorised by any other law in force in Saint Lucia toreceive the information or for the purposes of double4No.

6 ] Value Added Tax Act [ agreements with other States or to a person ina revenue or statistical department where theinformation does not identify a specific 8 provides for an oath or affirmation of secrecyto be taken by tax officers or other persons appointedunder or employed in carrying out the provisions of thisAct or a person to whom confidential information isdisclosed. A breach of clause 8 is a criminal offence 3 of the Bill provides for the imposition and rate oftax. Tax is charged at a rate of 15 per cent of the valueof goods or services imported into Saint Lucia or the valueof supply of goods or services to a taxable person on ataxable activity (clauses 9 and 10). Except in the case ofa zero rated supply, the rate of tax may be amended bythe Minister by Order published in the Gazette subjectto affirmative resolution of Parliament (clause 10).

7 4 of the Bill makes provision for registration ofpersons who make supplies of goods or services forconsideration subject to certain exceptions and to certaincircumstances in which registration is not required. Forexample, where the Value of supply does not exceed thethreshold of one hundred and eighty thousand dollarsduring the period of twelve months ending with themonth immediately before the month in which thesupply was made or where the Comptroller makes adeclaration that the Comptroller is satisfied that the valueof the person s supplies during the period of twelvemonths commencing with such month, after the noticeis given will not be more than one hundred and eightythousand dollars (clauses 11 and 12). The process forregistration including the submission of an application,the requirement for further information, the registration,the keeping and maintaining of a register, the display ofa certificate of registration, change of information andthe cancellation of registration is provided for in clauses13 and 14.

8 The registered person is required to recovertax from the person supplied (clause 15).5No. ] Value Added Tax Act [ 5 of the Bill provides for tax on supply. Clauses 16and 17 provide for zero rated supplies and exemptsupplies which are set out in the First and SecondSchedules respectively. Clause 18 provides for the timeof supply except in the case where special provision ismade. By virtue of clause 19, the place of supply of goodsis described generally as the place where the goods aredelivered or are made available to the recipient. A supplyof services takes place generally at the place of businessof the supplier from which the services are 20 describes the Value of supply for goods andservices generally as the amount of the considerationfor the 6 of the Bill provides for tax on virtue of Division 1 of Part 6 of the Bill, exemptimports are specified in Schedule Division 2 of Part 6 of the Bill, provision is made fortax on import of goods.

9 Tax is charged on the import ofgoods in an amount calculated by multiplying the rateof tax applicable under the Act by the Value of the goodsimported. The Comptroller of Customs is responsiblefor the collection of tax to which Division 2 applies. TheCustoms (Control and Management) Act, Cap. if the tax is a duty of customs (clause 22). Thetime of entry of imported goods means the time whengoods are entered for home use for the purposes of theCustoms (Control and Management) Act, Cap. (clause 23). The Value of goods imported is described inclause 24 as the Value of goods determined inaccordance with Schedule 2 to the Customs (Controland Management) Act, Cap. plus any other taxespaid or payable upon the entry of imported is made in clause 25 for the collection of taxby the Comptroller at the time of entry of goods and forthe submission of an import declaration by the ] Value Added Tax Act [ 3 of Part 6 of the Bill provides for tax on importof services.

10 By virtue of clause 26, an import of servicesoccurs at the time determined by applying clause 18 tothe import on the basis that the import is a supply ofservices. The Value of an import of services is generallydescribed as the amount of the consideration for theimport but where the import is made for no considerationor the consideration is less than the fair market Value ofthat import, or where the supplier and the recipient arerelated persons, the Value of that import is the fair marketvalue of the import (clause 27). Clause 28 provides forthe payment of tax for the importation of services andfor the submission of an import declaration within 20days after the tax period within which the services 7 of the Bill provides for the calculation of taxpayable.


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