On the 21st of February 2018 the Minister of Finance announced an increase in VAT - from 14% to 15%, effective from 1 April 2018.
This means that, if your business is VAT registered, you must charge the new rate of 15% on services rendered or goods delivered after 1 April 2018. Although this may sound simple enough, there are a few exceptions.
- Where an agreement to deliver goods was entered into before 1 April 2018, such goods can still be delivered and invoiced for at the current VAT rate (14%) if such products are delivered on or before 21 April 2018. An example is stock that must be ordered from overseas.
- In the event where invoice was issued before 1 April 2018, and payment is being made in installments, the installments may NOT be increased, even if installments are being paid after 1 April 2018. An example is Vehicle Finance.
- If you entered into a contract before 1 April 2018 for services to be rendered on a monthly basis after 1 April 2018, the services rendered after 1 April 2018 will be charged at the new VAT rate (15%). An example is a Cell Phone Contract.
The examples above are common scenarios. There are some other rules for other scenarios, so if you are unsure, please contact one of our Accountants to assist.