- Advance payments are considered payments before delivery of goods or services.
- VAT obligation arises when the advance payment is received.
- Suppliers must calculate and pay VAT on advance payments even if goods or services are not yet delivered.
- Recipients can deduct calculated tax if conditions under VAT Law are met.
- Additional VAT calculation is needed if advance payment does not cover full VAT for delivery.
- Reverse charge mechanism shifts VAT payment obligation to the recipient.
- In reverse charge cases, the supplier notes the VAT obligation transfer in the invoice.
Source: unija.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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