NIA CHARLESTOWN NEVIS (December 14, 2016) — The Inland Revenue Department is advising consumers to be vigilant on Discounted Value Added Tax (VAT) Rate (DVR) Day, December 16, 2016.
Consumers should ensure they collect and check their receipts to ensure that the reduced VAT rate of 5 percent was actually charged, and review their purchases.
If a customer buys a good at the special 5 percent rate during the DVR Day and exchanges it on the same day for another good, the 5 percent rate will still apply. The special rate will not apply if the exchange is done after DVR Day 2016.
If a customer buys a good during the DVR Day and returns the item after the day for a credit on the purchase of a different item, the normal 17 percent VAT Rate would apply to the sale of the newly-purchased item, even if it would have been eligible for the 5 percent rate during DVR Day.
If a customer buys an item before the DVR Day, but returns the item during the DVR Day and receives credit on the purchase of a different item, the reduced rate shall not apply on the sale of the new item.
Consumers can visit the Inland Revenue Department’s web sites www.sknird.com or sknvat.com for more information and a list of businesses authorised to take part in the DVR Day.
Businesses approved to participate in the DVR Day will be required to submit a schedule of the sales for that day, by the end of day on December 23, 2016 to the Inland Revenue Department.
This would include all sales at the reduced VAT Rate, Zero-rated or Exempt. The required form is available at the Taxpayer Services desk at the Inland Revenue Department.
Additionally, the VAT collected at the reduced rate must be reported on Line 135 of the VAT Return for the tax period December 2016.
Eligible goods sold under a credit or hire purchase agreement will qualify for the reduced rate of 5 percent, if the sale is concluded on the DVR Day.
Businesses are reminded that the VAT on the sales under credit terms must be reported in its entirety whether or not payment has been made in full during that tax period.