Exiting Cash VAT with Ordinary Deduction: No Need to Redetermine Credit for Previous Settlements

• Subjects that apply the cash accounting method must monitor their turnover
• If the threshold of 2 million euros is exceeded, they will automatically exit the regime
• If the threshold is exceeded without the taxpayer’s knowledge, late payment may occur
• In this case, the taxpayer would have to recompute the tax and pay it, even if not collected
• There may be doubts regarding the calculation of deductible VAT
• According to the law, VAT becomes payable when the consideration is actually received
• VAT on purchases becomes deductible when the consideration is paid to the supplier
• An example is given of a company that exceeded the threshold in the previous year
• The company would have to compute the tax not yet paid and recover the VAT on unpaid purchases
• From November 2023, the company would have to follow the ordinary rules

Source: eutekne.info

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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