The Government of Vanuatu has officially advised that Value Added Tax rate will increase from 12.5% to 15% from next Monday 1 January 2018.
A summary of how the rate change will impact your business is as follows:
Businesses registered for VAT on a payments basis
- Payments received or made on or after 1 January 2018 for invoices issued on or after 1 January 2018 will attract the new rate of 15%.
- Payments received or made for invoices issued before 1 January 2018 will remain at 12.5%. However an adjustment will be required on your VAT return to correctly account for it. Details are in the Transitional Guide released by the VAT Office.
Businesses registered for VAT on an invoice basis
- If the invoice was issued before 1 January 2018, the old rate of 12.5% applies (and will be included in that period’s VAT return).
- If the invoice is issued after 1 January 2018, the new rate of 15% applies.
Clients are reminded that the next two VAT returns (due on 5th January and 27 January 2018) relate to the period’s November and December 2017 respectively, and therefore the old rate of 12.5% still applies when calculating VAT payable/refundable.
Businesses utilising computerised accounting systems such as Xero, MYOB, Quickbooks, Opera, RoomMaster, etc. will need to manually update the tax rate in these systems on Monday 1 January 2018 to ensure that the correct VAT rate is charged. Please contact your software support provider/preferred advisor should you require assistance with this.
Additional documentation
Official Gazette No. 95 of 2017 (dated 22 December 2017)
VAT Rate Change – Notice to retailers
VAT Rate Change – Calculations
Customs VAT Rate Change – Calculations Bislama 291217
Customs VAT Rate Change – Notice to retailers Bislama 281217
