Gold Magazine January - February 2014, Issue 34 | Page 76

vat

Stock taking

All taxable persons who are affected by
the change in the standard VAT rate are
obliged to undertake a physical stock count
of their inventories by the close of business
on 12 January 2014. It should be noted
that, if the company is using an electronic
stock taking system, a physical stock take
does not need to be carried out. The stock

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taking should include both quantities and
values.
The final stock take report should be
kept as part of the business records for a
period of 6 years. As per the VAT Authorities, the purpose of performing a stock take
is to prevent situations where invoices for
the sales of goods taking place following the
increase of the VAT rate are moved back to
dates before the increase, thus applying the
old rather than the new rate.

Credit Notes

Question: If credit notes issued after 13 January 2014 relate to the adjustment of invoices
which were initially issued before 13 January
2014, which VAT rate should be applied to
those credit notes?
Answer: The rate to be applied is the VAT
rate which was applicable at the time of
supply of the goods or services. If a VAT
invoice was issued before the supply of
goods or services, the VAT rate that was
applicable at the time of issuing the invoice
should be applied. Therefore, the time
when a credit note is issued does not always
determine the applicable VAT rate; reference must also be made to the time of supply of the relevant goods and services.

Contracts /
agreements

Where these agreements continue after the
increase of the standard rate, only supplies
of goods or services made after the effective
date will be subject to the increased
standard VAT rate of 19%.

76 Gold the international investment, finance & professional services magazine of cyprus

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8% to 9%

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8% to 9%

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I

n issue 99 of its Indirect Tax
Update, KPMG provides the following important clarifications to
questions that may arise regarding
the upcoming increases to VAT.
As from 13 January 2014, the
standard VAT rate will increase
from 18% to 19% and the reduced VAT rate of 8% applicable on all
services falling under Schedule L