Three new Legal Notices were issued in 2013 which amend the 4th, 12th and the 14th Schedule of the VAT Act. These new regulations came into force on 1st January 2013 and bring into force the provisions of Council Directive 2010/45/EU amending Council Directive 2006/112/EC.

Legal Notice 140 of 2013 establishes that a tax invoice must be issued by the 15th day of the month following the date when tax on supplies becomes chargeable. Before the amendment, the law used to refer to a thirty day period.

Legal Notice 141 of 2013 establishes that a tax invoice must be issued by not later than the 15th day of the month following that in which the chargeable event occurs or the date on which a payment is received, whichever is the earlier.

Legal Notice 142 of 2013 establishes that the VAT cash accounting scheme which was previously available to all retailers, civil, mechanical and electrical engineering contractors and certain professional service providers, irrespective of their annual turnover, has with effect from 1st January 2013 been limited to such business with an annual turnover of less than Eur2 million. This means that such businesses that exceed an annual turnover of Eur2 million will be forced out of the scheme and will have to start accounting for vat on an accruals basis. Thus such businesses shall no longer have the option to have the tax on supplies made by them becoming chargeable on the date when a payment is made for that supply to the extent covered by that payment. Furthermore the right of deduction shall be postponed until the tax on the goods or services supplied to them has been paid to their suppliers. Tax invoice issued by such suppliers should mention the words ‘cash accounting’. Otherwise the option shall not apply.

For more details please contact the firm’s tax partner Stephen Balzan on