12 Nov Bad Debts on VAT Adjustments
Why lose more money than you should?
In these times of economic uncertainty, it not uncommon for a business to encounter customers who are not going to pay their bills on time, and a few who may not pay them at all.
For many establishments, cash flow is limited and any help to lessen the liability of bad debts is appreciated.
According to article (64) of Federal Law (8) of (2017), you can recover VAT on bad debts written off!
What are Bad Debts?
Bad debts can happen when a registered supplier sells goods to a registered recipient. This is because the registered supplier paid for the VAT at the time of supply.
Sometimes, recipients fail to make payments in part or full to the supplier, resulting to bad debts on the part of the supplier and because the VAT is paid by the registered supplier at the time of supply of goods or services, the Vat paid is a loss to the supplier if no or part payment is received.
Can I reclaim VAT on Bad Debts?
The government understands that these situations could happen— to ease the obligation of excess tax on businesses, a provision of bad debts output VAT adjustments has been incorporated in the article (64) of Federal Law (8) of (2017).
We can help you apply the law and recover VAT that you have already paid to the FTA against these bad debts. Our fees will be based on a percentage of the VAT recovered at no extra cost to you.
Please contact us for a FREE preliminary review.