Unit 1: Introduction to VAT and the VAT Compliance Framework — Glossary · Professional Certificate in VAT Compliance and Reporting

Adjusted Tax Base – Related terms #

taxable supply, input tax. The amount on which VAT is calculated after deducting allowable adjustments such as discounts, rebates, and returned goods. Example: A €1,200 invoice reduced by a €200 discount results in an adjusted tax base of €1,000. Challenge: Ensuring all adjustments are documented to avoid disputes with tax authorities.

Aggregate Turnover – Related terms #

business activity, registration threshold. The total value of all taxable supplies made by a business, including intra‑EU and export sales, before deductions. Used to determine whether a company must register for VAT. Practical application: A start‑up tracking monthly sales to anticipate crossing the €85,000 threshold.

Annual VAT Return – Related terms #

periodic filing, VAT liability. A comprehensive statement submitted once a year summarising all VAT transactions for the reporting period, including total output tax, input tax, and net VAT payable. Example: A small retailer filing an annual return by 31 January for the previous calendar year. Challenge: Reconciling monthly records to ensure accuracy.

Assessment Period – Related terms #

tax period, filing deadline. The specific timeframe for which VAT is calculated and reported, typically monthly or quarterly. The period determines the due date for the VAT return and payment. Practical tip: Maintain a calendar of assessment periods to avoid late submissions.

Audit Trail – Related terms #

record‑keeping, compliance evidence. A chronological record of all VAT‑related transactions, supporting documents, and system changes that enables verification of data integrity. Example: An ERP system that logs invoice creation, modification, and deletion timestamps. Challenge: Preserving a complete audit trail for the statutory retention period, usually ten years.

Base Rate – Related terms #

standard rate, reduced rate. The default VAT percentage applied to most goods and services unless a specific reduced or zero rate applies. In many jurisdictions the base rate is 20 %. Practical application: Applying the base rate to a €500 sale results in €100 VAT.

Business Activity – Related terms #

taxable supply, economic activity. Any commercial, industrial, or professional operation that generates taxable supplies. Determining the nature of the activity is essential for correct VAT classification. Example: A consultancy providing advisory services is a business activity subject to the standard rate.

Calendar Year – Related terms #

financial year, reporting period. The twelve‑month period from 1 January to 31 December used by many businesses for annual VAT reporting. Aligning accounting records with the calendar year simplifies compliance.

Capital Goods Scheme – Related terms #

adjustment, depreciation. A mechanism that spreads the VAT credit on high‑value capital assets over several years, reflecting the asset’s depreciation. Example: A €200,000 machine may generate annual adjustment entries for five years. Challenge: Calculating the correct adjustment each year.

Cash Accounting Scheme – Related terms #

payment basis, invoicing. Allows small businesses to account for VAT on the basis of cash received and paid rather than on invoice dates. Practical use: A retailer records output VAT only when the customer pays, reducing cash flow pressure.

Certificate of Registration – Related terms #

VAT number, tax authority. Official document issued by the tax administration confirming a business’s VAT registration and providing the unique VAT identification number. Example: A new importer receives the certificate after submitting the registration form.

Clearance Certificate – Related terms #

customs, export. A document authorising the release of goods for export, confirming that any VAT or duty liabilities have been settled. Required for cross‑border shipments to prove compliance.

Closed‑Loop VAT – Related terms #

intra‑community supply, reverse charge. A VAT system where the tax liability moves from the seller to the buyer, often used in intra‑EU transactions to prevent double taxation. Example: A German manufacturer sells to a French reseller, who accounts for VAT under the reverse charge.

Collective Tax Liability – Related terms #

joint and several liability, group registration. Situation where multiple parties (e.G., Partners in a partnership) are jointly responsible for the VAT owed. Practical implication: Each partner may be pursued for the full amount if the business cannot pay.

Compliance Calendar – Related terms #

deadline management, filing schedule. A planning tool that lists all VAT filing and payment dates, registration deadlines, and other compliance milestones. Helps businesses avoid penalties by ensuring timely submissions.

Consignment Sale – Related terms #

temporary export, VAT deferment. A transaction where goods are shipped to a third party for sale on behalf of the owner, with VAT treatment often deferred until the goods are sold. Challenge: Tracking the point of sale to trigger VAT accounting.

Corporate VAT Group – Related terms #

group registration, intra‑group supply. A structure allowing multiple related companies to register as a single taxable entity, simplifying intra‑group VAT accounting. Example: A parent company and its subsidiaries file one consolidated VAT return.

Cross‑Border VAT – Related terms #

import, export, EU VAT rules. VAT implications arising from transactions that cross national borders, including import VAT, export zero‑rating, and intra‑EU reverse charge. Practical tip: Verify the destination’s VAT status before invoicing.

Current Tax Year – Related terms #

assessment period, filing deadline. The fiscal year for which VAT is presently being accounted and reported. All VAT returns and payments within this year must reflect the current tax year’s rates and rules.

Customs Valuation – Related terms #

import duty, transaction value. The process of determining the customs value of imported goods, which forms the basis for import VAT calculation. Example: A shipment valued at €10,000 incurs import VAT at the prevailing rate.

Deemed Supply – Related terms #

self‑supply, intra‑community acquisition. A transaction treated as a supply for VAT purposes even though no actual sale occurs, such as when a business uses its own goods. Example: A manufacturer using inventory for internal testing must account for VAT as a deemed supply.

Deferred VAT Accounting – Related terms #

cash scheme, accrual basis. An approach where VAT on certain transactions is postponed to a later period, often used for high‑value assets or specific schemes. Challenge: Ensuring the deferral is correctly recorded and reversed.

Delivery Note – Related terms #

invoice, proof of supply. A document accompanying goods that confirms delivery details; it may be required to support a zero‑rated export claim. Practical use: Attaching the signed delivery note to the export invoice.

Denial of Input Tax – Related terms #

non‑recoverable VAT, blocked input. Situations where a business cannot reclaim the VAT paid on purchases, typically because the goods are used for exempt activities. Example: A financial services firm cannot recover VAT on office supplies.

Depreciation Schedule – Related terms #

capital goods scheme, asset life. A plan that outlines the expected depreciation of a capital asset over its useful life, used to calculate annual VAT adjustments under the capital goods scheme.

Digital VAT Reporting – Related terms #

e‑filing, VAT portal. The electronic submission of VAT returns via an online platform, often required by tax authorities for faster processing. Practical tip: Ensure software compatibility with the authority’s digital interface.

Direct Tax – Related terms #

income tax, corporate tax. Taxes levied directly on income or profits, distinct from indirect taxes like VAT. Understanding the interaction between direct and indirect tax obligations aids comprehensive compliance planning.

Discounts and Rebates – Related terms #

adjusted tax base, invoicing. Reductions applied to the invoiced amount that affect the VAT calculation; they must be reflected in the tax base before VAT is applied. Example: A 5 % discount on a €2,000 sale reduces the VAT‑able amount to €1,900.

Domestic Supply – Related terms #

taxable supply, intra‑community supply. A supply of goods or services that takes place within the same country, generally subject to the standard or reduced VAT rate.

Economic Operator Registration and Identification (EORI) Number – Related… #

A unique identifier assigned to businesses engaging in customs activities within the EU, required for filing import VAT and customs declarations.

Effective Date – Related terms #

legislation change, transition period. The date on which a new VAT rate or rule becomes applicable to transactions. Example: A VAT rate increase effective 1 January means all invoices dated from that day must use the new rate.

Electronic Invoicing (e‑Invoicing) – Related terms #

digital reporting, invoice compliance. The creation, transmission, and storage of invoices in an electronic format, often mandated for B2G (business‑to‑government) transactions. Challenge: Ensuring the electronic format meets legal standards for authenticity and integrity.

Exempt Supply – Related terms #

non‑taxable, zero‑rated. A supply of goods or services that is not subject to VAT, and for which input tax recovery is generally prohibited. Example: Most financial services are exempt supplies.

Export Zero‑Rating – Related terms #

outside EU, proof of export. The application of a 0 % VAT rate to goods shipped outside the EU, provided sufficient evidence of export is retained. Practical application: Retaining customs export documents to support the zero‑rating.

Factoring Arrangement – Related terms #

invoice discounting, cash flow. A financing agreement where a third party purchases receivables, affecting the timing of VAT accounting for the original supplier. Challenge: Determining whether VAT is due at the time of factoring or upon receipt of payment.

Filing Deadline – Related terms #

assessment period, late penalty. The final date by which a VAT return and any payment must be submitted to avoid interest and penalties. Example: A monthly deadline of the 20th of the following month.

Flat Rate Scheme – Related terms #

simplified accounting, turnover limit. A scheme allowing small businesses to pay a fixed percentage of turnover as VAT, without detailed input tax calculations. Practical use: A café with €40,000 turnover may apply a 12 % flat rate, simplifying compliance.

Foreign Currency Transaction – Related terms #

exchange rate, VAT calculation. A supply denominated in a currency other than the domestic one, requiring conversion at the appropriate exchange rate for VAT purposes. Example: A UK supplier invoicing a US client in USD must convert the amount to GBP using the rate on the invoice date.

Fully Taxable Business – Related terms #

standard rate, input recovery. A business whose activities are wholly subject to VAT, allowing full recovery of input tax on purchases. Example: A retail clothing store that sells only standard‑rated goods.

General Anti‑Abuse Rule (GAAR) – Related terms #

tax planning, artificial arrangements. A provision allowing tax authorities to disregard transactions that are solely designed to obtain a tax advantage. Challenge: Ensuring that legitimate business restructurings do not trigger GAAR scrutiny.

Goods and Services Tax (GST) – Related terms #

VAT, indirect tax. A value‑added tax system used in many non‑EU jurisdictions, similar in principle to VAT. Understanding GST concepts aids comparative compliance for multinational firms.

Holding Company – Related terms #

group registration, intra‑group supply. A company that owns sufficient voting stock in other companies, often used to centralise management and VAT compliance for a group.

Import VAT – Related terms #

customs duty, deferred payment. VAT payable on goods brought into the country, typically collected by customs at the point of entry. Example: A €5,000 import subject to a 20 % rate incurs €1,000 import VAT.

Intra‑Community Supply – Related terms #

reverse charge, EU VAT number. A sale of goods between VAT‑registered businesses in different EU Member States, generally zero‑rated in the seller’s country and subject to reverse charge in the buyer’s country.

Intra‑Community Acquisition – Related terms #

reverse charge, acquisition tax. Purchase of goods from another EU Member State, where the buyer accounts for VAT under the reverse charge mechanism. Example: A French company buying €10,000 of goods from Germany must self‑assess French VAT.

Invoice Matching – Related terms #

three‑way match, purchase order. The process of reconciling an invoice with the corresponding purchase order and receipt to verify accuracy before recording VAT. Challenge: Maintaining consistent data across systems.

Invoice Numbering – Related terms #

sequential order, audit requirement. A mandatory practice to assign unique, sequential numbers to each VAT invoice, facilitating traceability. Example: Using a format INV‑2024‑001, INV‑2024‑002, etc.

Joint and Several Liability – Related terms #

collective tax liability, partnership. Legal principle where each party in a partnership can be held responsible for the entire VAT debt. Practical implication: A tax authority may pursue any partner for the full amount.

Judgment Debt – Related terms #

court order, VAT assessment. A VAT liability confirmed by a court judgment, often after a dispute or audit. Must be recorded and paid like any other assessed VAT.

Legal Entity – Related terms #

company, partnership. The entity recognised by law as having rights and obligations, including VAT registration responsibilities.

Liability Period – Related terms #

assessment period, payment due. The timeframe during which VAT becomes payable, usually aligning with the assessment period.

Limited Taxable Person – Related terms #

small business, flat rate scheme. A taxpayer whose turnover falls below the registration threshold, potentially eligible for simplified schemes.

Local Tax Office – Related terms #

tax authority, compliance assistance. The regional office of the tax administration responsible for processing VAT registrations and returns.

Loss Carry‑Forward – Related terms #

tax credit, corporate tax. The ability to offset future taxable profits with current year losses; while not directly a VAT concept, it influences overall tax planning.

Low‑Value Consignment Relief (LVCR) – Related terms #

import VAT, threshold. A relief allowing imports below a certain value to be exempt from import VAT. Example: Goods under €22 may qualify for LVCR in some jurisdictions.

Make‑Tax‑Pay – Related terms #

VAT cash flow, timing. A phrase describing the cash flow impact of VAT, where a business must pay VAT before receiving payment from the customer.

Margin Scheme – Related terms #

second‑hand goods, used car. A special VAT calculation method applied to the profit margin of resale transactions, used for second‑hand goods, works of art, and similar items. Example: A dealer buying a used car for €8,000 and selling it for €10,000 calculates VAT on the €2,000 margin only.

Missing Invoice – Related terms #

reconstruction, audit risk. A situation where an original VAT invoice cannot be located, requiring reconstruction from other evidence. Challenge: Ensuring reconstructed documents meet audit standards.

Mixed Supply – Related terms #

partial exemption, allocation. A supply that includes both taxable and exempt components, requiring apportionment of input tax. Example: A conference that includes a taxable catering service and an exempt educational session.

Monthly Return – Related terms #

assessment period, filing deadline. A VAT return submitted each month, summarising that month’s output tax, input tax, and net VAT payable.

Net VAT Payable – Related terms #

output tax, input tax. The difference between VAT collected on sales and VAT reclaimed on purchases; the amount due to the tax authority.

Non‑Resident Supplier – Related terms #

reverse charge, registration. A supplier that does not have a fixed establishment in the country of the buyer, often subject to reverse charge rules.

Non‑Recoverable Input Tax – Related terms #

blocked input, exempt supply. VAT incurred on purchases that cannot be reclaimed because the related goods or services are used for exempt activities.

Obligation to Register – Related terms #

turnover threshold, VAT number. The legal requirement for a business to obtain a VAT registration once its taxable turnover exceeds the prescribed limit.

Obligation to Submit Returns – Related terms #

filing deadline, periodic filing. The duty to file VAT returns within the statutory period, regardless of the amount of VAT due.

Off‑Premises Sale – Related terms #

tax point, place of supply. A sale where the goods are delivered to a location other than the seller’s premises, affecting the tax point determination.

On‑Account Payment – Related terms #

estimated liability, cash flow. An advance payment of VAT based on estimated liability for the upcoming period, common in large enterprises.

Open‑Book Arrangement – Related terms #

transfer pricing, VAT compliance. A collaborative approach where parties share cost and pricing information to ensure correct VAT treatment.

Operating Margin – Related terms #

margin scheme, profit calculation. The profit earned on a sale after deducting direct costs; relevant when applying the margin scheme.

Out‑of‑Scope Supply – Related terms #

non‑taxable, foreign transaction. A supply that falls outside the jurisdiction’s VAT legislation, such as services performed entirely abroad.

Partial Exemption – Related terms #

mixed supply, apportionment. A method allowing businesses that make both taxable and exempt supplies to recover a proportion of input tax based on a formula.

Periodic Filing – Related terms #

monthly return, quarterly return. The regular submission of VAT returns according to the frequency assigned by the tax authority.

Permanent Establishment – Related terms #

non‑resident supplier, registration. A fixed place of business through which a non‑resident entity carries out activities, potentially triggering VAT registration.

Petrol Tax Credit – Related terms #

fuel surcharge, input tax. A specific credit for VAT incurred on fuel purchases, often subject to special rules.

Post‑Invoice Adjustment – Related terms #

credit note, amended return. A correction made after an invoice has been issued, affecting the VAT amount. Example: Issuing a credit note for a €500 overcharge reduces the output tax accordingly.

Pre‑Registration Activity – Related terms #

pre‑VAT, early compliance. Business activities undertaken before formal VAT registration, which may still generate VAT obligations.

Pre‑payment VAT – Related terms #

advance payment, tax point. VAT due on deposits or advance payments before the actual supply takes place.

Pro #

Forma Invoice – Related terms: quotation, customs declaration. A preliminary document outlining the details of a future supply, often used for customs purposes but not a tax invoice.

Professional Services – Related terms #

standard rate, taxable supply. Services rendered by qualified professionals such as accountants, lawyers, and consultants, typically subject to the standard VAT rate.

Purchase Order – Related terms #

invoice matching, procurement. A formal request for goods or services that initiates the procurement process and serves as a reference for invoice verification.

Qualified Invoice – Related terms #

tax credit, electronic invoicing. An invoice that meets all statutory requirements, enabling the recipient to recover input tax.

Recurring Supply – Related terms #

subscription, continuous service. A supply of goods or services that occurs at regular intervals, such as monthly utilities, each creating a separate tax point.

Reference Number – Related terms #

invoice number, transaction ID. A unique identifier used to trace a specific VAT transaction within accounting systems.

Refund Request – Related terms #

excess input tax, audit. An application to the tax authority for repayment of VAT overpaid or reclaimed after an audit.

Registration Number – Related terms #

VAT number, tax identifier. The unique number assigned to a VAT‑registered entity, used on all tax invoices and returns.

Regulated Entity – Related terms #

financial services, exemption. A business operating in a sector subject to specific regulatory oversight, which may affect its VAT status.

Related Party Transaction – Related terms #

intra‑group supply, transfer pricing. A transaction between entities that have common ownership, requiring careful VAT documentation to avoid disputes.

Reverse Charge Mechanism – Related terms #

intra‑community acquisition, domestic services. A system where the buyer, rather than the seller, accounts for VAT on a supply. Common in cross‑border services and certain domestic sectors such as construction.

Revenue Authority – Related terms #

tax office, compliance enforcement. The government agency responsible for collecting VAT and enforcing compliance.

Risk Assessment – Related terms #

audit planning, internal controls. The process of identifying areas of potential VAT non‑compliance and prioritising them for review.

Sales Ledger – Related terms #

output tax, invoice tracking. The record of all sales transactions, forming the basis for calculating output VAT.

Self‑Billing – Related terms #

invoice agreement, reverse charge. An arrangement where the buyer issues the invoice on behalf of the supplier, often used in the construction industry.

Service Provision – Related terms #

place of supply, B2B services. The delivery of intangible work, which may be taxed based on the location of the customer.

Supply Chain – Related terms #

intra‑group supply, logistics. The sequence of processes involved in producing and delivering a good or service, each potentially generating VAT events.

Supply of Goods – Related terms #

tax point, place of supply. The transfer of tangible items from seller to buyer, generally creating a VAT liability at the point of transfer.

Supply of Services – Related terms #

tax point, B2C, B2B. The provision of intangible work, where the tax point may be the invoice date or the date of receipt, depending on the rules.

Tax Agent – Related terms #

representative, filing assistance. A person or firm authorised to act on behalf of a taxpayer for VAT matters, including filing returns and handling queries.

Tax Base – Related terms #

adjusted tax base, taxable amount. The monetary value on which VAT is calculated before applying the rate.

Tax Credit – Related terms #

input tax, refund request. The amount of VAT that a business can offset against its VAT liability, derived from VAT incurred on purchases.

Tax Deferral – Related terms #

cash scheme, capital goods. The postponement of VAT payment to a later period, often used to improve cash flow.

Tax Exemption Certificate – Related terms #

exempt supply, proof of status. A document confirming that a buyer is exempt from VAT on certain purchases, such as a charitable organisation.

Tax Point (Time of Supply) – Related terms #

invoice date, receipt date. The moment when VAT becomes chargeable, typically the earlier of invoice issuance or payment receipt.

Tax Return – Related terms #

VAT return, filing deadline. The formal declaration submitted to the tax authority detailing VAT liabilities and credits for a given period.

Taxable Activity – Related terms #

business activity, VAT registration. Any operation that generates a supply of goods or services subject to VAT.

Taxable Base – Related terms #

tax base, adjusted tax base. Synonym for the amount on which VAT is calculated.

Taxable Supply – Related terms #

standard rate, reduced rate. Any supply of goods or services that is subject to VAT at the applicable rate.

Taxable Turnover – Related terms #

aggregate turnover, registration threshold. The total value of taxable supplies made by a business, used to determine registration obligations.

Third‑Party Administrator (TPA) – Related terms #

tax agent, outsourcing. An external service provider that manages VAT compliance on behalf of a business.

Third‑Party Invoicing – Related terms #

self‑billing, subcontractor. A situation where an invoice is issued by a party other than the actual supplier, often requiring special documentation.

Threshold Limit – Related terms #

registration threshold, small business. The turnover level that triggers mandatory VAT registration.

Time of Supply Rules – Related terms #

tax point, invoicing. The legislative criteria that determine when a supply is deemed to have occurred for VAT purposes.

Trade Discount – Related terms #

adjusted tax base, invoicing. A reduction in price offered to a buyer, which must be reflected in the VAT calculation before the rate is applied.

Transaction Value – Related terms #

customs valuation, import VAT. The price actually paid or payable for goods, forming the basis for customs duties and import VAT.

Transfer Pricing – Related terms #

related party transaction, arm’s length. The pricing of transactions between related entities, which can affect VAT if the price deviates from market rates.

Travel Expenses – Related terms #

input tax, partial exemption. Costs incurred for business travel, where input VAT may be recoverable depending on the nature of the expense.

VAT Audit – Related terms #

risk assessment, compliance check. An examination by tax authorities of a taxpayer’s VAT records to verify accuracy and adherence to legislation.

VAT Base – Related terms #

tax base, taxable amount. Another term for the amount on which VAT is calculated.

VAT Blocked Input – Related terms #

non‑recoverable input tax, partial exemption. Input tax that cannot be reclaimed because the related supply is exempt or partially exempt.

VAT Clearance – Related terms #

customs, import VAT. The process of confirming that all VAT obligations on imported goods have been satisfied before release.

VAT Compliance Framework – Related terms #

risk assessment, internal controls. The set of policies, procedures, and systems a business uses to ensure accurate VAT reporting and payment.

VAT Credit Note – Related terms #

post‑invoice adjustment, refund request. A document issued to reduce the amount of VAT previously charged on an invoice.

VAT Exemption – Related terms #

exempt supply, non‑taxable. A status that removes VAT from a particular supply, often accompanied by restrictions on input tax recovery.

VAT Flat Rate – Related terms #

flat rate scheme, turnover limit. A simplified rate applied to a business’s total turnover, used under the flat rate scheme.

VAT Group Registration – Related terms #

corporate VAT group, intra‑group supply. The process of registering multiple related entities as a single VAT taxpayer.

VAT Invoice – Related terms #

qualified invoice, tax credit. A document that meets statutory requirements, enabling the recipient to claim input tax.

VAT Liability – Related terms #

net VAT payable, filing deadline. The amount of VAT that a taxpayer owes to the tax authority for a given period.

VAT Notice – Related terms #

tax authority communication, compliance update. Official guidance or updates issued by the tax administration concerning VAT rules.

VAT Online Portal – Related terms #

digital VAT reporting, e‑filing. The web‑based platform provided by tax authorities for submitting VAT returns and related documents.

VAT Periodic Return – Related terms #

monthly return, quarterly return. The regular VAT filing required by the tax authority, summarising output and input tax for the period.

VAT Refund – Related terms #

excess input tax, audit. The repayment of VAT to a taxpayer when input tax exceeds output tax, often after a review or audit.

VAT Registration – Related terms #

obligation to register, VAT number. The act of applying for and receiving a VAT identification number from the tax authority.

VAT Registration Number – Related terms #

VAT number, identification. The unique identifier assigned to a VAT‑registered business, required on all tax invoices.

VAT Return Filing – Related terms #

periodic filing, filing deadline. The act of submitting the completed VAT return to the tax authority within the prescribed time.

VAT Return Period – Related terms #

assessment period, filing deadline. The specific interval (monthly, quarterly) for which a VAT return must be filed.

VAT Scheme – Related terms #

flat rate scheme, cash accounting scheme. A specific set of rules that a business may elect to follow for VAT calculation and reporting.

VAT Suspended Supply – Related terms #

tax point, deferred payment. A supply where VAT is not due until a later event, such as the receipt of payment or delivery of goods.

VAT Threshold – Related terms #

registration threshold, turnover limit. The level of taxable turnover that obliges a business to register for VAT.

VAT Turnover – Related terms #

aggregate turnover, taxable activity. The total value of taxable supplies made by a business, used to assess registration and compliance obligations.

VAT‑Exempt Goods – Related terms #

exempt supply, non‑taxable. Goods that are not subject to VAT, often including financial services and education.

VAT‑Inclusive Pricing – Related terms #

tax point, invoice amount. Pricing where the VAT amount is included in the total price shown to the customer; the seller must extract the VAT component for reporting.

VAT‑Liable Person – Related terms #

taxable person, registration requirement. An entity that is required to register for VAT and account for the tax on its supplies.

VAT‑Payable – Related terms #

net VAT payable, filing deadline. The amount of VAT that must be remitted to the tax authority after offsetting input tax.

VAT‑Registered Business – Related terms #

VAT registration, compliance obligations. A company that holds a VAT number and is required to charge, collect, and remit VAT.

VAT‑Recoverable Input – Related terms #

input tax, credit note. VAT incurred on purchases that can be reclaimed against output tax.

Vendor Invoice – Related terms #

purchase order, invoice matching. An invoice received from a supplier, forming the basis for input tax recovery.

Verification of Supply – Related terms #

audit trail, documentation. The process of confirming that a supply has occurred and meets the criteria for VAT treatment.

Virtual VAT Number – Related terms #

e‑commerce, marketplace. A temporary identifier used in electronic marketplaces to facilitate VAT collection before the final seller’s VAT number is known.

Voluntary Registration – Related terms #

obligation to register, input tax recovery. The option for a business to register for VAT even if its turnover is below the mandatory threshold, often to reclaim input tax.

Wholesale Supply – Related terms #

taxable supply, standard rate. The sale of goods in large quantities, typically to retailers, subject to VAT at the applicable rate.

Withholding Tax – Related terms #

payment deduction, VAT impact. A tax deducted at source on certain payments, which may affect the timing of VAT accounting.

Zero‑Rated Supply – Related terms #

export, essential goods. A supply that is taxable but charged at 0 %, allowing input tax recovery. Example: Most food items in many jurisdictions.

Zero‑Rated Export – Related terms #

export zero‑rating, customs documentation. A supply of goods shipped outside the EU, eligible for a 0 % VAT rate when proper export evidence is retained.