:::: Valued Added Tax Service

January 7, 2009

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VAT OFFICE LOCATOR:

ADABRAKA LVO: Address:VAT House, Ring Road Central, Circle Next to Busy Internet Private Mail Bag, General Post Office Accra Telephone:(233)-028 – 9539216 - 19 Fax:(233)-021-247958 Email:adabrakalvo@vats.gov.gh URL:

AFLAO VSS: Address:1st Floor, Excel Filling Station, Viepe P.O. Box 289 Aflao Telephone:(233)-0962-30663 / 30693 Fax:0962- 30693 Email:aflaovss@vats.gov.gh URL:

BOLGA VSS: Address:SSNIT Building (Sacred Heart Catholic Church) P.O Box 509, Bolga Telephone:(233)-072-22171 / 23477 Fax:(233)-072-23477 Email:bolgavss@vats.gov.gh URL:

CAPE COAST VSO: Address:1st Floor Municipal District Edu. Block Near Jubilee Sch. Beulah Lane. P.O. Box CT. 958 Cape Coast Telephone:042-32072/30469/35926 Fax:042-30469 Email:capecoastvso@vats.gov.gh URL:

HEAD OFFICE: Address:Near IRS Head Office Ministries Area P.O. Box 17177 Accra Telephone:(021) 661525/610030-3 Fax:021 - 674186 Email:info@vats.gov.gh URL:

HO VSO: Address:SIC Building, Ho Bankoe, P.O Box 134, Ho Telephone:(233)-091-26789/27212 Fax:(233)-091-27212 Email:hovso@vats.gov.gh URL:

KANESHIE LVO: Address:Dadeban Rd, Katenit Building North Industrial Area, Kaneshie, Private Mail Bag 197, Acccra - North Telephone:(233)-021-224368 / 244910 - 9 Fax:(233)-021-244912 Email:kaneshielvo@vats.gov.gh URL:

KOFORIDUA LVO: Address:SSNIT Building (4th Floor) P. O. Box 2034 Koforidua Telephone:081-22516 Fax:081-22313 Email:koforidualvo@vats.gov.gh URL:

KUMASI LVO: Address:SIC Building, Near Prempeh Assembly Hall, Kumasi Private Mail Bag Kumasi Telephone:051-26738/29457/27772 Fax:051-27772 Email:kumasilvo@vats.gov.gh URL:

MADINA VSO: Address:Madina Shell Filling Station Hollywood Plaza, Madina Accra Telephone:(021)- 519962-4 Fax: Email:madinavso@vats.gov.gh URL:

Frequently Asked Questions: Please click on the answer link to show/hide answer to the question.

ALL FAQs ON Filing VAT Returns

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I’ve lost my VAT return?
Ask your local VAT office for a new one immediately to avoid a possible default penalty or interest payments. You must not use one issued for another tax period, a photocopy or a return originally issued for another VAT registration.

I don’t get my return in on time?
If your return is late, or you fail to pay all the VAT due, you will be in default and may be liable to a default penalty and/or interest chares. So please remember to send your return and any payment due in good time.

I have to be away from my business for a time?
You must arrange for someone else to complete your VAT returns and make payments for you.
I’ve received an assessment for failing to send in a return?

If you have already sent in your return and payment for the period, ask your local VAT office and check if they have received it.

I’m sending in a return after paying and assessment for the period?
When you send in your return, fill it in as usual. Do not adjust any of the figures to offset what you have already paid. If the return is more than the assessment, pay the extra; if it is less, we will pay or credit you with the difference.

My return is sent back because I made a mistake?
We will have sent you a letter with the return. It will tell you where you went wrong and how to put it right.

I’ve received a ‘Notice of Assessment’ to correct a mistake detected by a visiting officer?
You should not include any of the assessed figures on your net VAT return. Where you owe us VAT send your payment and the remittance advice separately to your LVO. Where we owe you VAT, we will pay or credit you with the amount.

I can’t pay all the VAT due?
You must still send in your VAT returns to your local VAT Office by the due date. Please don’t send postdated cheques. Write separately to your local VAT office explaining why you can’t pay. Default interest will be incurred on any unpaid balance.

What if I make payments on account?
If you make payments on account, do not adjust any of the figures in the boxes on your VAT return. The amount you should pay is the net liability shown (Box 13) less any payments on account which have already been made in respect of that period.

I haven’t received my repayment?
Don’t put a query on or with your next return – that could cause delay. Enter any credit from Box 14 of your return for last month in Box 15 of your next return. If your repayment has been unduly delayed you may be entitled to an extra payment to compensate you for the delay.

I haven’t got proof of export for an export sale?
The positive rate applies and you must account for VAT on the return.

I can’t make an accurate return?
Contact your local VAT office who may assist you.

My business circumstances changes?
If your business circumstances changes you must write to your local VAT office immediately giving full details. You will find more about this in The VAT Guide (Public Notice No.3).

FAQs ON HOW TO REGISTER FOR VAT/NHIL?

Answer

The first step to registration is to complete the VAT Form 1 and Taxpayer Identification Form. The completed forms should be sent with the required information to the Local VAT Office nearest to the principal place of business. The VAT Form 1 and Taxpayer Identification Forms can be obtained from any VAT Office.

When the forms are processed, the taxable persons will be issued with a VAT Certificate. The VAT Certificate shows clearly the effective date of registration and the Taxpayer Identification Number (TIN). The TIN can be used in transactions with all other revenue institutions in the country.

The VAT Certificate must be displayed prominently at the principal place of business.

1. WHAT HAPPENS AFTER REGISTRATION?
A registered person is issued with VAT/NHIL returns (VAT Form 20). This form enables the registered person to declare his business activities for a given month. This form has sections where the registered person shall state his sales and purchases, and the payment or credit due to the VAT Service. Payment may accompany the form if necessary.

2. OBLIGATIONS OF A VAT/NHIL REGISTERED PERSON
The registered person is obliged to charge 12½% VAT and 2½% NHIL on all taxable sales. The registered person is also obliged to keep records of VAT/NHIL charged and paid. Record should also be kept of all material supporting sales made / or received and a distinction made between exempt and taxable sales.

The registered person is also obliged to submit monthly returns of sales and purchases made on the VAT form 20 (returns).

3. WHAT IF I DO NOT REGISTER?
According to section 56 of the VAT Law (Act 546) 1998, there are serious implications for refusing to register when a taxable person qualifies as such. The penalty for a deliberate or reckless refusal to register is a fine not exceeding ¢10million or imprisonment for a term not exceeding 5years or both. For any other reason, the penalty is a fine not exceeding ¢5million or imprisonment for a term not exceeding one year or to both. In addition, the business or individual will be liable to pay the amount of tax not collected on taxable sales made from the date registration should have taken place.

The Commissioner of the VAT Service may also compulsorily register any business that qualifies but refuses to apply for registration.

4. VOLUNTARY REGISTRATION
The VAT Law (Act 546) 1998 makes provision for a business with sales turnover below ¢100million a year to register. This type of registration is known as voluntary registration and makes it possible for businesses who do not qualify to register to enjoy the numerous benefits VAT/NHIL registration offers. To qualify for voluntary registration, a business must;

a) Have a fixed place for conducting business
b) Keep proper accounting records
c) Be able to file regular and reliable tax returns

5. CANCELLATION OF REGISTRATION (DEREGISTRATION)
To initiate the process of removing a business’s name from the VAT register, the registered person has to complete an impending deregistration (VAT 16) Form. This process may be continued only when the Commissioner of the VAT Service is satisfied that the registered person has ceased to exist.

A registered business can remove its name from the VAT Register only if it ceases to exist, or it ceases to deal in taxable goods. For retailers of goods, if sales fall below the required turnover limit for registration (about GH¢35) a day then cancellation of registration may be considered.

FAQs ON INPUT TAX

Answer

What is Input Tax?

Many of the things you buy are likely to be subject to VAT, but as a VAT registered business you can reclaim the VAT charged on business purchases and expenses. This is your input tax. It includes not only the VAT on your raw materials or on goods you buy for resale but also the VAT on things like:

• Office equipment for your business
• Your telephone bills (in so far as it has been used for your business)
• Payment for services relating to your business operations (e.g. accountants’ or solicitors’ fees).

It does not include VAT paid on goods or services for someone else’s business, neither does it apply to VAT on private purchases such as furnishings for your home. VAT charged in these circumstances is not part of your input tax.

Can I always get back my input tax?

When you spend money and have to pay VAT ask yourself, ‘Is this expense wholly and exclusively incurred for my business?’ If it is, then you may be able to reclaim the tax – in other words you can claim back your input tax.

The VAT rules about business expenses are sometimes different from the IRS rules. You should not assume that because something is a deductible expense under the IRS rules you could automatically deduct the VAT charged on it.

Remember – If in doubt seek clarification or advice from your Local VAT Office (LVO).

What if I make exempt supplies?
If, in addition to making taxable supplies, you make exempt supplies, (such as sale of essential drugs, local newspapers, certain food items in their raw state, rental of property or financial services) you will not be able to deduct all your input tax. This is because you are called a ‘partly exempt’ registered business.

What if I use something privately as well as for the business?
If you use goods or services for both business and private purposes, such as your telephone, you can only reclaim the VAT on the expenses relating to business use. The VAT law provides the basis for apportioning the tax between the business and personal uses. Your local VAT office can also assist you in apportioning the claim.

FAQs ON OUTPUT TAX

Answer

FAQs ON WHO SHOULD REGISTER FOR VAT

Answer

HOW TO FILE YOUR VAT/NHIL RETURNS

Answer

BEFORE YOU START

Nil return
If you have not traded in the period and have no VAT on purchases (inputs) to recover or VAT on sales or acquisitions (outputs) to declare, all you are required to do is tick Box 1 on the form.

You must then complete the Declaration section of the form and send it to your local VAT Office to arrive by the due date in the normal way.

Final return
If you are in the process of deregistration and a final return has been issued you must account for VAT on Stocks and assets on hand at the close of business on the effective date your registration is cancelled.

Errors on earlier returns
Any errors you discover on VAT returns already submitted must be notified in writing to your local VAT Office.

If the net result of any errors is an amount payable to the VAT Service you should send full payment with your disclosure but remember the amount may also be liable to Interest.
An assessment will be issued by your local VAT office to correct the period in which the error occurred.

How to file your VAT/NHIL returns

COMPLETING YOUR RETURN

BOX 1

Tick the Box 1 only if your are submitting a NIL return.

COMPLETING YOUR RETURN

BOX 3

Put in Box 3 the amount of output VAT due on sales and other outputs.

REMEMBER
Leave out any amounts notified to you as assessments by the VAT service.

How to file your VAT/NHIL returns
	COMPLETING YOUR RETURN BOX 2 Put in Box 2 the VAT exclusive value of all your positive rate supplies. Do not include the value of exports (Box 4) or supplies on which tax has been remitted (Box 6). *REMEMBER* If you use the cash accounting scheme, you must base the figure you put in this box on invoices for which you have received payments this month, not invoices issued.

How to file your VAT/NHIL returns

How to file your VAT/NHIL returns

COMPLETING YOUR RETURN

BOX 3

Put in Box 3 the amount of output VAT due on sales and other outputs.

REMEMBER
Leave out any amounts notified to you as assessments by the VAT service.

How to file your VAT/NHIL returns

COMPLETING YOUR RETURN

BOX 4

Put in Box 4 the total value of any supplies of goods and/or services exported during the period.

REMEMBER
You cannot zero-rate any supplies unless you hold satisfactory documentary evidence.

BOX 5
Put in Box 5 the total value of any exempt supplies of goods and/or services made during the period.

REMEMBER
Be sure you have checked the Law (Schedule 1) to make sure the supplies qualify for exemption.

BOX 6
Put in box 6 value only of any supplies made during the period on which tax has been officially remitted (relieved).

REMEMBER
These are relief supplies covered by the Law (Schedule 3). You must be in possession of an approval letter from the Commissioner of VAT for each transaction

How to file your VAT/NHIL returns

COMPLETING YOUR RETURN

BOX 7
Put in Box 7 the VAT exclusive total of your positive rated inputs. Do not include the value of any imports or goods removed from warehouse.

REMEMBER
You should exclude:

· Wages and salaries

· Income tax and National Insurance Contributions

· Money put into and taken out of the business by you

· Loans, dividends, and gifts of money

· Insurance claims.

How to file your VAT/NHIL returns