VAT registration is a requirement under the VAT Act [CAP 247] and it requires that every approved licensed business operating and conducting business activities in Vanuatu which had their annual gross turnover reached VUV4 million or expected to be over than VUV4 million a year must register for VAT purposes.
Under the VAT Act, Section 12, states the following:
(1) Subject to this section, every person who carries on a taxable activity and is not already registered becomes liable to be registered under this Act –
(a) at the end of any month if the total value of supplies made in Vanuatu by the person in the year which ends with that end of that month in the course of carrying on taxable activities has exceeded four million vatu; or
(b) at the start of any month if there are reasonable grounds for believing that the total value of supplies made in Vanuatu by the person in the year which starts at the start of that month in the course of carrying on taxable activities will exceed the registration threshold amount.
Failure to comply
According to Section 12(6) of the VAT Act, it states that, if a person has not applied for registration and the Director establishes that they should be registered, the Director can register the person with effect from the date the person first became liable to be registered. The person will then be required to file returns and account for VAT on all supplies made from the date the Director registers them.
Any person carrying on a taxable activity may voluntarily register for VAT, even if the total value of taxable supplies they make is less than the registration threshold. The main advantage of voluntary registration is that a deduction can be claimed for VAT paid on taxable supplies received. The main disadvantages are that the registered person must account for VAT on all taxable supplies made, meet the record-keeping requirements and file regular VAT returns. Some smaller businesses register for VAT because of their dealings with larger registered businesses that prefer to deal only with VAT registered businesses.
A person who has voluntarily registered for VAT is subject to all the same requirements under the VAT Act as a person who is required to register.
The VAT Office wishes to advise all eligible new and old businesses that are yet to come over and disclose their business to apply for VAT registration at the VAT Office immediately.
The VAT Office have received a number of unanimous information’s from the public at large on businesses who have been operating in country but fail to come forward and apply for VAT registration, to please make every effort to come to the VAT Office and apply to register, before the VAT Office will soon discover your business and apply relevant Sections of the VAT Act to get your business registered and apply relevant spot fines as necessary.