Navigating Cross-Border VAT: Compliance Essentials for Gibraltar’s Digital Economy and B2B/B2C Risks

• VAT compliance is essential for Gibraltar’s digital economy, especially for cross-border services, regardless of Gibraltar’s no-VAT status.
• Failure to prove B2B transactions can result in B2C default, triggering retroactive VAT liabilities, penalties, and mandatory foreign VAT registration.
• The “Two-Item Rule” and robust documentation are critical for B2B validation and audit defense.
• B2B transactions benefit from the reverse charge mechanism, while insufficient evidence shifts VAT obligations to the supplier under B2C rules.
• Proactive compliance, including comprehensive audits and systematic procedures for evidence collection, is strongly recommended.

Source: fiscal-requirements.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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