'Turnover' consists of professional fees together with commissions, costs and charges whatsoever, which a lawyer is entitled to receive. State lawyers are not obliged to register in respect of their activities as employed State lawyers. However, they are obliged to register if their annual turnover from other professional activities exceeds or is likely to exceed the VAT registration threshold.
The VAT office will force register those lawyers who fail to register for VAT purposes as they are obliged to do so by law.
The VAT Act is very clear with regards to VAT registration requirements and the VAT Office will enforce the law. Almost all services supplied by Lawyers are liable to VAT at the standard rate of 12.5%.
The VAT Office also plans to audit all VAT registered legal practices in Vanuatu within the next 18 – 24 months. The primary purpose of the VAT audits of lawyer or lawyer’s practices is the audit of the VAT returns of the individual lawyer or partnership, or both, as the situation demands. In carrying out these audits VAT Officers will not be collecting, collating or verifying client information. Confidential information which does not have a bearing on the VAT liability of any lawyer or legal practices will not be sought by VAT Officers.
However, VAT legislation obliges lawyers to give authorized VAT Officers access to books, records and other documents, information and explanations for the purposes of verifying the VAT liabilities of any individual lawyer or practice. VAT Officers are also entitled to reasonable assistance in this regard. VAT Officers will seek access to books, records, documents and information and explanations relating to tax so as to verify the amounts of professional income and other income earned within a specified period, and also to verify the correct accounting for VAT.
The VAT Office will work with the key representative’s to level the playing field for all within the legal profession in Vanuatu for VAT purposes.
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 email us.
