Indirect Tax Services 

One way or another, most transactions involve indirect taxes. Taxes like VAT, customs duties and eco-contributions are part and parcel of every day transactions including sales, purchases and imports/exports. While they can represent a major cost and compliance burden, such taxes can often also offer a cash flow management challenge.

The magnitude of tax collections and refunds is often rarely highlighted in financial statements.  It is often the case that minor indirect tax errors can translate to significant consequences through the repetition of transactions. Inefficient business structures or processes can prove costly.

 

Since Malta’s accession to the EU in 2004, government policy and EU decisions have had a dramatic effect on the VAT and customs systems in Malta. Changes to EU Directives affect our national legislation whereas EU Regulations have direct effect on the taxpayer. Rates and indirect tax liabilities in various EU countries change frequently and the number of indirect tax compliance visits and investigations carried out by the VAT administration is increasing. With the rise in international trade, addressing cross-jurisdictional issues and complying with the indirect tax obligations in Malta and elsewhere can be a truly complex and daunting task.

 

KPMG in Malta understands the challenge of staying on top of indirect taxes. We know how important it is to devise systems that process each transaction using the right indirect tax treatment and capturing the data required by the tax authorities.  It is rather unsettling to have to deal with tax authorities when the process goes wrong. That is why we provide a range of indirect tax services ranging from preventative services such as health checks to identify potential problem areas to indirect tax planning. Our indirect tax services include:

 

Anthony Pace

Anthony Pace

Partner, Tax Services

+356 2563 1134

Juanita Brockdorff

Juanita Brockdorff

Partner, Tax Services

+356 2563 1000

Domestic and international VAT advisory.

Whether you are looking to reduce costs or use VAT to achieve competitive advantage, we provide you with the tax technical insights and skills you need to realise your most important business ambitions. We can help in establishing your company's VAT status, development and execution of effective indirect tax management strategies including internal controls, advising on the indirect tax consequences of entering new markets and undertaking corporate transactions such as global restructuring, mergers, acquisitions and capital reconstructions, provide relevant advice on the VAT treatment of particular transactions, conducting diagnostic and analytical reviews of your VAT practices, maximising VAT recovery, VAT cashflow management and compliance processes review.

 

VAT compliance. 

With the new VAT place of supply rules effective as from 1 January 2010 the compliance obligations of taxpayers have altered and increased. This is just one of the changes passed through our VAT law recently which brought about a change to the format of the VAT return and the requirement to submit additional prescribed VAT forms.  How aware are you of these changes? Whereas on the one hand less than excellent house-keeping can result in penalties, damaged reputation and missed opportunities, on the other hand it is a challenge to retain excellent standards of compliance. In order to help taxpayers in meeting this challenge, KPMG provides services such as assistance with VAT registration, preparation and submission of VAT returns, recapitulative statements, intrastat and other VAT forms, refund applications, computation of partial attribution, reporting and assistance with adjusting VAT returns.  We also assist taxpayers in filing objections and appeals, liaise with the VAT Department on such matters and support taxpayers in the course of tax audits or other investigations by tax authorities.

 

Duty on documents and transfers.

Malta adopts a system of imposing duty on particular documents including certain policies of insurance and transfers of particular assets such as immovable property and securities whether on death or otherwise. We provide advice on structuring transfers of property in the most cost-effective manner and on your eligibility to duty exemptions.  We also offer guidance on all aspects of duty including preparation of valuations of property for duty purposes and documentation required by the Inland Revenue Department to affect such transfers in a duty-compliant manner.

 

Customs, excise and international trade.  International trade is a risk laden environment. With particular relevance to the retail and manufacturing industries, the trend is to focus closely on the international supply chain with a view to minimising cost. Customs and excise duties and related expenses tend to have direct impact on the bottom line for organisations. Regulation in this field is highly specialised and interacts heavily with cross-border jurisdictions’ legislations. We provide our clients advice on the opportunities created in duty planning, consulting on international trade, conducting reviews of duty systems in place, assisting in the reclamation of duties overpaid and in meeting the reporting obligations.

 

 

  

 

2012 KPMG Benchmark Survey on VAT

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KPMG’s Global Indirect Tax Services practice is pleased to share with you the 2012 Benchmark Survey on VAT.

Driving Indirect Tax Performance - Managing the Global Reform Challenge

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Indirect taxes keep growing in importance for governments globally, and further changes are on the way. KPMG International’s whitepaper explains what's happening and provides guidance to business on how to actively manage global reform challenges.

Amendment to VAT law

 

A very recent amendment to Malta’s Value Added Tax Act has extended the potential sphere of application of a legal provision providing for relief from value added tax (VAT) on the transfer of a business on a going concern basis.

Amendment to VAT law - Budget 2011, VAT Measures enacted

 

On 22 March 2011, an Act of Parliament implementing the fiscal measures of Malta’s Budget for 2011 was enacted as Act IV of 2011.  The said Act included certain amendments to the Value Added Tax (VAT) Act.

 

Amendment to VAT law - Mitigation of VAT penalties and interest

 

On 19 April 2011, an Act of Parliament amending various laws was published in the Malta Government Gazette as Act V of 2011.  The said Act included, amongst others, certain amendments to the Value Added Tax (VAT) Act.

 

VAT refunds

 

A new provision relative to Value Added Tax (VAT) – which had been announced in the Budget Speech for 2010 and included in the relative Budget Measures Implementation Act – has taken retrospective effect as from 1 August 2011 by virtue of Legal Notice 407 of 2011 (published in the Government Gazette of Malta of 11 October 2011).

 

VAT Amnesty Scheme

 

As announced last week by the Minister of Finance during the Budget Speech, and as enacted by virtue of Legal Notice 456 of 2011, a temporary VAT amnesty scheme is being launched with the aim of incentivising VAT registered taxpayers to regularise their position with the VAT Department in relation to any VAT arrears.

VAT Health Check

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Our VAT Health Check service consists of a review of the VAT processes within your business. The purpose is to provide you with recommendations to streamline the VAT affairs of your business and minimise potential future complications with the VAT Department. It is also a purpose of the VAT Health Check to identify potential opportunities to achieve VAT savings and other efficiencies.