But it also requires registered persons to show “reasonable care” in keeping full, accurate and proper records for VAT purposes. Further, if business records are lost, stolen or destroyed, the onus is on the business to do its best to recreate and or obtain copies of relevant source documents that may be required for a VAT audit.
Recently the VAT Office have experienced that few registered persons when selected for a VAT audit informs the VAT Auditor that the records for the periods selected for audit are not available either due to a laptop being stolen or that the relevant source documents being lost.
If your VAT records are lost, stolen or destroyed you must write to the VAT Office immediately giving full details of how it happened and must provide a police report. The VAT advice or dealings with such circumstances will be based on a case by case basis. The VAT Office will conduct its own assessment to establish if you took reasonable precautions to prevent the destruction or lose and, if the document was written evidence, it is not reasonably possible to obtain a substitute document. However where such documents include tax invoices or receipts then copies must be obtained from the suppliers.
The VAT Office would like to make it very clear that bank statements can only confirm that a payment has been made and although they may be able to confirm who the payment was made, bank statements cannot confirm what the purchase was for, which is very important for the VAT Auditors to know in order to establish if the expense was directly linked in deriving the taxable income of the registered person. The VAT Office will not accept the bank statements as the only record to support a VAT input tax credit claim.
Registered persons must know by now that the most important reason for keeping good and proper records is that it is a legal requirement that is clearly legislated in the VAT Act No. 12 of 1998 [Cap. 247].
The VAT Auditors has in the past and will continue to disallow all input credits claimed where the Auditor is not satisfied with the reasons provided by registered persons with regards to lost, stolen or destroyed VAT records.
For more information on any VAT issues, please contact the VAT Office by phone: 00(678) 24573 and 00(678) 37517 (Santo), visit us at our Office in Carnot Street, Port Vila or email us at
