VAT considerations to help you better navigate the new reality presented by COVID-19.
Indirect tax has proved to be a major tool used by governments worldwide to cushion the effect of COVID-19 on businesses and consumers alike. On the VAT front, the Government of Malta has announced that VAT credit refunds will be accelerated and that as part of the Tax Deferral Scheme VAT payments may be deferred. On 29 April the Ministry for Finance and Financial Services reported the extension of the scheme for taxes owed up to and including June 2020. The settlement period for the deferred taxes remains to be announced. Deferral for the payment of VAT is not automatic and requires the submission of an online application form by not later than the 15th May 2020. More information about the Tax Deferral Scheme can be found through the link below.
Previously, VAT falling due in March and April were to be settled in two equal instalments with the two quarterly returns immediately following the quarter whose dues would have been deferred. Taxpayers not having quarterly periods were to settle the VAT due in the period covered in two equal instalments as follows: (i) for VAT due in March 2020, by 15 June 2020 and 15 September 2020; (ii) for VAT due in April 2020, by 15 July 2020 and 15 October 2020.
COVID-19 is a stark reminder that ‘Cash is King’, therefore accounting for VAT in a correct manner is key to ensure that indirect tax supports your business’s cash flow management efforts without creating any future VAT exposures for your business. The following are some cash flow management tips and considerations:
Our KPMG VAT team remains at your disposal for any inquiries or need for practical assistance you may have in the current situation. We would be more than happy to discuss the issues your business is facing through a conference call or online meeting in order to help you better navigate the new reality presented by COVID-19.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2021 KPMG, a Maltese civil partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.