VAT Compliance and VAT Health Checks

The magnitude of tax collections and refunds is often rarely highlighted in financial statements.  It is often the case that minor indirect tax errors can translate to significant consequences through the repetition of transactions. Inefficient business structures or processes can prove costly.

Since Malta’s accession to the EU in 2004, government policy and EU decisions have had a dramatic effect on the VAT and customs systems in Malta. Changes to EU Directives affect our national legislation whereas EU Regulations have direct effect on the taxpayer. Rates and indirect tax liabilities in various EU countries change frequently and the number of indirect tax compliance visits and investigations carried out by the VAT administration is increasing. With the rise in international trade and e-commerce, addressing cross-jurisdictional issues and complying with the indirect tax obligations in Malta and elsewhere can be a truly complex and daunting task.

We understand the challenge of staying on top of indirect taxes. We know how important it is to devise systems that process each transaction using the right indirect tax treatment and capturing the data required by the tax authorities.  It is rather unsettling to have to deal with tax authorities when the process goes wrong. That is why we provide a range of indirect tax services ranging from preventative services such as health checks to identify potential problem areas to indirect tax compliance.

Our VAT Health Check service consist of the conducting of diagnostic and analytical reviews of your VAT practices, maximising VAT recovery, VAT cashflow management and compliance processes review. This ensures that the company is not exposed to risks stemming from their VAT reporting that can lead to fines and interest that can accumulate to a significant amount if non-compliance, even if unintentional, has occurred over a span of time. In the instance where any such instances are identified, management can be able to take necessary remedial measures to correct past instances of non-compliance and rectify their VAT position to minimise potential future complications with the VAT Department. It is also a purpose of the VAT Health Check to identify potential opportunities to achieve VAT savings and other efficiencies.

Whereas less than excellent VAT housekeeping can result in penalties, damaged reputation and missed opportunities, it is a challenge to retain consistently excellent standards of compliance with the requirements of the ever-evolving VAT law. In order to help taxpayers in meeting this challenge, we provide services such as assistance with VAT registration, preparation and submission of VAT returns, recapitulative statements, Intrastat and other VAT forms, refund applications, computation of partial attribution, reporting and assistance with adjusting VAT returns.  We also assist taxpayers in filing objections and appeals, liaise with the VAT Department on such matters and support taxpayers in the course of tax audits or other investigations by tax authorities.

International trade is a risk laden environment. With particular relevance to the retail and manufacturing industries, the trend is to focus closely on the international supply chain with a view to minimising cost. Customs and excise duties and related expenses tend to have direct impact on the bottom line for organisations. Regulation in this field is highly specialised and interacts heavily with cross-border jurisdictions’ legislations. We assist our clients by conducting reviews of duty systems in place, assisting in the reclamation of duties overpaid and in meeting the reporting obligations.