This means that the registered persons are required to keep their business records in an ordered manner allowing the Director to assess their VAT liability for any specified period without delay or difficulty.
The VAT Auditors have experienced that in some cases, registered person’s records are not kept in an orderly manner and it is extremely difficult for the Auditors to ascertain their correct VAT liability. Under Section 54, the Director is entitled to demand that the registered person produce appropriate records. This would usually involve the VAT Office giving the registered person a set period (e.g. 5 working days) to sort their records and arrange them into a proper order that could be audited by the VAT Office. Requests are most commonly made when a registered person has been selected for an audit. In this situation the VAT Office advises the registered person in writing that a specific period has been selected for audit and requests the relevant records for that period. As the audit progresses, additional records may be requested verbally or in writing.
The VAT Office warns registered person’s that where records are requested for audit purposes and if the records provided are not in an ordered manner, the records will be returned back to registered person to be represented in an orderly and accepted manner. If the registered person fails to do that within the required period the VAT Office will disallow all input tax claimed in the VAT returns under audit. Also it is an offence under the VAT Act if the registered person fails to keep or properly maintain records of their business activities (taxable activities) carried as required under the VAT Act.
Keeping proper VAT records ensures you as a registered person to have a record of all output tax (i.e. VAT on sales) you have charged, as well as input tax (i.e. VAT on purchases) you have paid. As well as ensuring you comply with your legal obligations and maintaining accurate VAT records makes it easy to complete your VAT return and get the VAT you paid back.
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.
