What are the requirements for a contract to qualify for transitional provisions?
A contract must meet the following requirements to qualify for transitional provisions:
- The contract must have been signed before May 1, 2017.
- The taxable supplier must be able to completely deduct the input tax on the supply (or refund the tax).
- The customer must submit a written letter to the supplier confirming their eligibility to deduct and refund the input tax completely.
Any supply made after December 31, 2018 will be taxable under the VAT regime. Contracts that contain VAT-related provisions, and contracts where the price of goods and services can be adjusted legally to include VAT, are exempt from transitional provisions.