Meaning of occurrence of the chargeable event under VATA

What is occurrence of the chargeable event under VATA

 

The details about occurrence of the chargeable event under Value Added Tax ACT (VATA) are explained here. 

Occurrence

This article will introduce you to the determination of the chargeable event and the date of its occurrence, essential for the proper application of the provisions of the Value Added Tax Act (VATA).

Chargeable event within the meaning of Art. 25 (1) VATA is the supply of goods or services effected by taxable persons under this Act, the intra-European Union acquisition, as well as the importation of goods, while under Art. 11 RAVATA a chargeable event is also any supply effected by taxable persons under the Act, including supplies whereof the place of transaction is outside the territory of the country.

The chargeable event occurs on the date on which ownership of the goods passes or on which the services are performed. Pursuant to Art. 25 (7) VATA, the tax becomes chargeable upon receipt of the payment (with the exception of a payment received in connection with an intra-European Union supply). In certain cases the chargeable event occurs without any transfer of ownership over property - on the date of the actual delivery of the goods.

Date of occurrence of the chargeable event

Generally according to Art. 25 (2) VATA, the chargeable event occurs on the date on which ownership of the goods passes or on which the services are performed.

There exist some exceptions. For supplies with continuous performance for more than a year, for which no chargeability exists for a period of more than a year. In the case of such supplies, the chargeable event is considered to have taken place at the end of each calendar year and, in the calendar year in which supplies are terminated, the chargeable event occurs on the date of termination of the supplies - Art. 25 (5) VATA.

A chargeable event for services occurs on the date on which the service has been performed - Art. 25 (2) VATA. The service is deemed as performed on the date on which the revenue therefrom should be declared under the applicable accounting standards.

 Date of occurrence of the chargeable event for actual delivery of the goods

The chargeable event occurs on the date of the actual handing over of the goods as per Art. 6 (2) VATA, except for supplies of newspapers, magazines, books and other publications, music audio and video recordings, as well as recordings of films on an electronic or technical medium, when other conditions are present, outlined in detail in VATA.

 

Date of occurrence of the chargeable event for supplies on the granting of copyright

This is the date on which the authors or copyright holders approve the allocated amounts of collective management organizations by signing a bilateral protocol. When, prior to the chargeable event, payment is made on delivery, the tax becomes chargeable upon receipt of the payment (Art. 12 (7) RAVATA).

Date of occurrence of the chargeable event for intra-European Union acquisitions

This is the date on which the chargeable event would have occurred upon a supply within the territory of the country (Art. 63 (1) VATA). An exception to this rule is provided only in intra-European Union acquisition of goods by a taxable person, which will be used for the purposes of their economic activity and the goods are dispatched or transported by or on behalf of the same person from another Member State. In this case, the chargeable event occurs on the date on which the transportation of goods on the territory of the country terminates.

Chargeable event for importation

It occurs and the tax becomes chargeable on the date on which the obligation to pay import duty within the territory of the country arises, or should have arisen, including where such an obligation does not exist or the rate of the said obligation is zero (Art. 54 (1) VATA). Where no payment obligation to pay import duty arises, the chargeable event occurs and the tax becomes chargeable on the date on which the formalities at customs end.

The information on occurrence of the chargeable event under Value Added Tax ACT (VATA)is detailed above.   Comment below your thoughts on occurrence of the chargeable event under Value Added Tax ACT (VATA).

 


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