This recently released interpretation note sets out the documentary proof that is acceptable to the Commissioner as contemplated in section 11(3), in instances where goods or services are supplied at the zero rate.

A fundamental principle of VAT is that goods or services supplied by a vendor in the course or furtherance of the vendor’s enterprise should generally be subject to VAT at the standard rate (that is, 14%). Section 11(1) and (2) respectively, make provision for a vendor to supply certain goods or services at the zero rate. In order to zero-rate these supplies, a vendor must comply with section 11(3) which requires a vendor to obtain and retain sufficient documentation to substantiate the zero-rating of such supplies.

The provisions of section 11(3) place an obligation on a vendor to obtain and retain documentary proof as is acceptable to the Commissioner substantiating the vendor’s entitlement to apply the zero rate to a supply of goods or services under sections 11(1) and (2).

The documentary proof, acceptable to the Commissioner, which must be obtained and retained by a vendor in order to substantiate the entitlement to apply the zero rate under section 11(1) and (2), is set out in Tables A and B of the interpretation note.

Click on the attached link to view the full interpretation note and the above mentioned tables: