Importance of VAT records

Section 54 of the Value Added Tax (VAT) Act No.12 of 1998 [CAP 247] (the act) sets out the record-keeping requirements for VAT. The section requires every registered person who supplies goods and services in Vanuatu, to keep in Vanuatu sufficient records in English, French or Bislama to enable the Director to readily ascertain the person's liability to tax.

What constitutes records?

The term "records" is defined in the VAT Act as including:

  • books of account (whether manual, mechanical or electronic);
  • a record of all goods and services supplied by or to the registered person identifying the goods and services, the suppliers or their agents;
  • all invoices, tax invoices, credit notes and debit notes relating to the supplies made or received;
  • other documents as are necessary to verify the entries in the books of account and 
  • the system and programme documentation that describes the accounting system used.

Ready ascertainment of liabilities

 It is a requirement for a registered person to keep sufficient records “to enable ready ascertainment by the Director of the registered person’s liability to tax”. This means that registered persons are required to keep their business records in an ordered manner allowing that would allow the Director to assess their VAT liability for any specified period without delay or difficulty.

In many cases, the registered person’s records are not kept in an orderly manner and it is extremely difficult for the VAT Office 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 giving the registered person a set period of time (e.g. 5 working days) to sort their records and arrange them into a proper order

Records must be kept for 6 years

Registered persons must keep their business records for a minimum of 6 years after the end of the return period to which they relate. In addition, the Director may, by notice in writing before the expiry of the 6 year period, require a registered person to retain specific records for a further period of up to 3 years where the Director is investigating, or intends to investigate, the VAT affairs of the registered person.

Destruction of records within 6 years

The VAT Office may provide approval for a registered person to destroy their records within the 6 year period if:

(i) the Director has advised the registered person in writing that retention of the books and supporting documents is not required; or

(ii) the registered person is a company that has 

In each of these cases the registered person must make a written request to the VAT Office. No records should be destroyed within the 6 year timeframe until written approval from the VAT Office has been received.

Records kept outside of Vanuatu

In certain circumstances a registered person may be authorised to keep their records outside of Vanuatu. Applications for such authorisation must be made to the VAT Revenue and Compliance Manager in writing. Approval should only be given on the understanding that the records must be made available within 14 days of any request made by the VAT Office.

Approval to keep records outside of Vanuatu will be given only in exceptional circumstances, one example might be where a branch of an offshore company operates in Vanuatu with no accounting or administration staff and all the accounting tasks are performed by the head office overseas.

Benefits of keeping sufficient records

Keeping sufficient records helps you in the following areas: 

  • Helps you to prepare your tax return;
  • Ensure you are able to claim all your entitlements/refunds;
  • In case we ask you to prove the information you provided in your tax return;
  • Reduce the risk of tax audits and adjustments;
  • Improve communication with us resolve issues relating to disputed assessments or adjustments;
  • Avoid exposure to penalties;
  • Minimize the cost of managing your tax affairs and
  • helps you to provide written evidence of your income and expenses if required.  

For more information on any of our articles published in our weekly column, please contact the VAT Office by phone: +678 24573 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it.

General Enquiries

Private Mail Bag 9012,
La Casa D'Andrea E Luciano Building,
Rue Pierre Lamy,
Port Vila, 
Republic of Vanuatu

Phone: (+678) 33010
Fax: (+678) 22597