VAT return by an individual entrepreneur – Is it possible?
An individual entrepreneur can be exempted from paying a multitude of taxes by applying special tax regimes. There are certain instances too when individual entrepreneurs too are expected to pay VAT. The article below helps you with details like how to draw up and calculate VAT refunds, the refund of paid amounts, etc.
The process of payment and reimbursement of VAT is regulated by Chapter 21 of the Tax Code. Refunds are entitled only to the taxpayers. In general cases “special regimes” are not allowed to claim refunds.
Two concepts need to be distinguished. Refundable VAT and Input VAT
Deduction in VAT tax – input tax where the individual entrepreneur gets a reduction in VAT payable
Tax refunds can be applied only by individual VAT consultants in Sharjah, but in certain cases, persons with preferential treatment can also apply for tax deductions. The products are subjected to VAT or resale. Acquired goods and services also require accounting.
Deductions for transactions are confirmed by accounting documents, invoice along with the allocation of tax amounts. Deductions can be applied while an IP beneficiary issues invoices along with counterparts of VAT consultancy UAE. Tax deductions are also obtained by the commitment to file a tax return and transfer tax to the budget. Sometimes tax deductions get refused by the Federal Tax Service Inspectorate and in such cases, you can appeal for the refusal. While appealing for refusals, the court usually favors particular regimes.
Individual entrepreneurs are not allowed to claim VAT refunds as they do not pay VAT, but under certain circumstances, they are expected to pay this tax and submit a declaration to the IFTS. VAT non-payment may lead to a tax liability which includes violation of deadlines and failure to provide IP.
Eradicating Problems with IFTS
In order to eradicate problems with IFTS, it is better to maintain a reliable account. This facilitates the timely transfer of VAT and other taxes. Individual entrepreneurs who are not keen on maintaining their accounts can hand it over to an outsourcing company.
Procedure for VAT refund
The following steps can be followed to return VAT IP
- A tax return filed electronically reflects a negative VAT result
- In case of a reimbursement application, a desk audit is conducted and decision or refusal is taken within 7 days.
- In case of violations, individual entrepreneurs receive the inspection report citing the reasons for refusal. He can refuse the same or appeal in court.
In the case of a positive decision, the document is sent to the applicant within 5 days. - The settlement amount is then transferred to the individual entrepreneurs’ account or acquired for payment of future VAT or federal taxes.
- VAT can be reimbursed in a declarative manner only by
- Individual Entrepreneurs whose tax payment exceeds 7 billion rubles in the past 3 years
- Individual Entrepreneurs who present a bank guarantee along with the declaration.
VAT refund for exported products
VAT refunds are special in case of a foreign economic activity. Tax deductions can occur when a taxpayer purchases goods or services for export, or while importing products into the country for which the tax was paid. In such cases VAT refunds are possible.
In that case, it is necessary to confirm the statutory VAT refund along with a package of accompanying documents to the inspectorate for export operations. This includes waybills for export products, purchase contracts, and customs declaration.
The collected papers must be submitted within 180 days to the Federal Tax Service from the date of export customs procedure. Failing leads to paying tax at the general rate of 20%.
VAT refund not only requires knowledge about different nuances but also real experience in defending before the tax authorities. We at Beyond Numbers are experts in the same and are ready with situations of the same along with ways to resolve them. You can request a personal meeting or call us up on the same to discuss.
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