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For any business starting out, one of the most important things to understand is Value Added Tax (VAT).

It’s an important factor to consider, as it affects all aspects of a business and its operations. Whether you’re based in Malta, Portugal, United Kingdom, Cyprus or United Arab Emirates. This quick guide will help you gain a better understanding of VAT and how it applies to your business.

What is VAT?

VAT (Value Added Tax) is a type of tax that applies to most goods and services supplied by businesses. VAT is a consumption tax, meaning it is ultimately paid by the end consumer. Businesses collect VAT on behalf of the government, which helps fund public services. Companies must register for VAT when they reach a certain turnover threshold, depending on the country.

International companies may have to pay different taxes in different countries where they operate. As each country has its own VAT regulations. VAT registration is a legal obligation for businesses and failure to register can result in significant financial penalties. Therefore, new businesses must understand the process and obligations around registering for VAT before they start trading.


How do I register for VAT?

Depending on the country you’re based in, the process for registering for VAT may vary slightly. However it typically involves submitting an application form to your local tax authority.

In Malta, Portugal, United Kingdom, Cyprus and United Arab Emirates, business owners can register for VAT online or with a paper-based application. To register for VAT in any of these countries, you’ll need to provide details about your company including its name and address, details of the products or services you’ll be providing, and an estimate of your expected annual sales turnover.

In some countries, businesses must use the services of an accountant when registering for VAT. This is especially true if the business is dealing with international customers or suppliers. If you’re unsure whether this is required in your country, arrange a meeting with RHJ Accountants to find out more.

By registering for VAT, businesses can keep track of all their taxable sales and purchases, allowing them to calculate and submit their VAT returns accurately. This also ensures they comply with the local tax regulations in their country.


What can I claim back on my VAT return?

Generally, some of the main items that can be claimed back include:

  • Input tax; this is the VAT you pay on goods and services you buy to use in your business.
  • Capital goods scheme; this is available if you have bought any equipment or machinery used for business purposes.
  • Export sales; if you export goods outside of the EU, you may be able to reclaim the VAT on those sales.
  • Services from another EU country; if you buy services from another EU country, you may be able to reclaim the VAT paid on those services.
  • Bad debts; if a customer has not paid you for goods or services and it is not possible to collect the payment, you may be able to claim back the VAT that was originally charged.

Overall, understanding what can be claimed back on a VAT return is an important part of running a successful business. It is essential to hire an accountant who can help you understand the specific rules and regulations in your country. To ensure that you are claiming all the applicable items.


How RHJ Accountants can help

Having a certified accountant in any country is essential for new businesses to thrive and grow. RHJ Accountants can help you with many different aspects of tax services, including your VAT returns. We have extensive experience working with both local and international businesses, so we are equipped to helping you make the most of your tax situation.

Our team will work with you to analyse your business’s activities and provide tailored advice on how best to manage your tax compliance. We will also be available to answer any questions you may have regarding VAT regulations in different countries. If you wish to focus on more important matters, our team can also assist with completing and filing VAT returns on time and accurately.

If you’re looking for a reliable partner to help manage your business’s taxes, then look no further than RHJ Accountants. Arrange a consultation with our team today to understand how we can help you simplify your VAT returns and other tax matters.

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💬 PSA: between April & June our Portuguese team have limited meeting availability due to the Tax Return Submission Period 🇵🇹