Public Clarification VAT P017

Time Frame for Recovering Input Tax

FTA has recently issued Public Clarification VAT P017 on Input Tax claiming which brings about clarity in the understanding of input claim.

The recent public clarification provides clarity and flexibility on claiming input tax based on the invoice receipt and intention to pay (Internal approval process) It would be advisable to document the policy and date of intention to pay which would be applied consistently.

Note: If person fails to make the payment before the expiration of 6 months after the agreed date of payment, input tax should be reversed in the first return after expiry of 6 months However, once the payment is made input tax can be recovered again.