Value Added Tax, or VAT, is applied to both goods and services in Trinidad and Tobago and is included in the final price of the product. VAT is charged at a rate of 12.5%. VAT-registered businesses must collect VAT from customers, submit VAT returns and pay any VAT that they owe to the Inland Revenue Division of the Ministry of Finance. VAT-registered businesses can deduct any VAT that they pay when purchasing goods and services for the business from the VAT that they collect from customers. If the amount of VAT that a business pays is more than they collect, the Inland Revenue Division will refund the balance.
Who is Required to be Registered?
Any person who conducts a busines activity and makes commercial supplies (sales/receipts) witha gross value in excess of $500,000.00 in any twelve (12) month period is required to apply for registration.
|Sole Proprietor||Partnership||Limited Liability Company|
|Complete Registration Forms (Form A and Form B)||Complete Registration Forms (Form B and Form C)||Complete Registration Forms (Form B and Form C)|
|Original and copy of
||Original and copy of
||Original and copy of
|"Acceptable evidence where total commercial supplies or anticipated commercial supplies are/will be in excess of $500,000.00 over a 12 month period."||"Acceptable evidence where total commercial supplies or anticipated commercial supplies are/will be in excess of $500,000.00 over a 12 month period."||"Acceptable evidence where total commercial supplies or anticipated commercial supplies are/will be in excess of $500,000.00 over a 12 month period."|
|BIR File Number of
||BIR File Number of
||BIR File Number of
- A letter of Authorisation together with proper identification must be produced by anyone (other than the Owner/Partner/Director) who is acting on behalf of the applicant.
- All forms and letters must be signed by the Owner/Partner/Director
Acceptable Evidence of Trading Activity
A combination of the following documents must be presented as evidence of Trading Activity i.e. evidence that the VAT registration threshold (presently $500,000.00) has/will be made within a twelve (12) month period.
- Bank Statements for the last three (3) months reflecting the level of Trade Activity;
- Copies of Payment Cheques received for goods/services;
- Copies of invoices generated to customers;
- Copies of Purchase Invoices from suppliers;
- Contract/Letter of Award between the applicant and the other party (must be acceptable to the Board of Inland Revenue);
- Any other documentation that shows evidence that the VAT registration threshold has been/will be made (subject to acceptance by the Board of Inland Revenue)
Guidelines for Keeping Books and Records
The following are basic guidelines for the keeping of books and records.
It must be kept:
- In the English language;
- In the currency of T&T;
- At the principal place of business;
- In such form as would enable the BIR to determine the accuracy of the information appearing on the VAT Return.
N.B. When submitting VAT Returns it is not necesssary to attach invoices, however proper invoicing requirements must be met for all claims and must be submitted upon request.
Tax Invoicing Requirements
The tax invoice should include:
- The words "Tax Invoice"
- Identifying serial number and the date it was issued
- Name, address, and VAT Registration number of supplier
- Name and address of recipient
- Complete description of the goods/services sold
- VAT exclusive figure
- Value of VAT
- Total value of the supply
Value of a Supply
Arm's Length Transaction
The VAT charged on a supply is calculated by multiplying the value of the supply by the rate of tax.
Non-Arm's Length Transaction
Where the transaction is between associated persons, the value of the supply is the open market value. The open market value will also be used on barter transactions.
Time of Supply
The time of a supply identifies the tax period in which a transaction is to be taxed. THe tax period is the period for which a registered person is to account for VAT to the Board of Inland Revenue.
The general rule is that a supply takes place on the earliest of the following
- The date the invoice was issued
- The date of payment
- The date when the goods are made available or in the case of services, when the services are supplied
DOs and DON'Ts of VAT
- Register for VAT if you make or intend to make commercial supplies in excess of $500,000.00 in a twelve (12) month period
- Account for VAT at the standard rate fo 12.5% on standard rated supplies
- Display your VAT Registration Certificate
- Issue TAX Invoices
- Keep proper books and records
- Keep those books and records for a period of six (6) years or three (3) years from the date of filing returns, whichever is later
- File your VAT Returns by the 25th day of the month following the end of your tax period
- Pay VAT liability by the due date, if liable
- Return your VAT registration Certificate upon deregistration
- Don't charge VAT if you have been deregistered
- Don't display a Certificate not issued by the BIR, nor should you display one after deregistration
- Don't submit an unsigned VAT Return
- Don't display a faded, photocopied, or an illegible VAT Registration Certificate
- Don't provide false information to the BIR