What is capital goods scheme?
A scheme under the VAT Act includes an anti-abusive provision to limit the claiming of input VAT on capital goods that are not used for the trading activity of a taxable person. The reference period is five years for all tangible capital assets, except for immovable property, for which the reference period is 20 years.
What is the criteria?
Tangible Good
>=
€1,160
+
Used for the production of the income
How is it calculated?
1
Change in
Asset's Usage
Where a taxable person initially was using the asset to provide taxable supplies but now the asset is being used for exempt without credit supplies or the supply no longer is within the scope of VAT. For example, a garage used as a warehouse to store inventory is now being used to rent out to an individual to put his car in.
2
Change in Economic Activity
When the company initially was providing only taxable supplies but later on started supplying a mix of supplies ie. Both taxable and exempt without credit supplies.
3
Change in VAT Registration
E.g. from article 10 to article 11 (exempt) vat registration.
How is it calculated?
1
Change in
Asset's Usage
Onetime adjustment – to refund back to the vat department the part of vat remaining during the reference period not elapsed.
2
Change in Economic Activity
Partial attribution would be used in this case – Annual adjustment would be required depending on how much the asset is being used for taxable supplies and exempt without credit supplies.
3
Change in VAT Registration
Onetime adjustment – to refund back to the vat department the part of vat remaining during the reference period not elapsed.
Adjustment in the VAT Return
Claw backof the input vat claimed —-> Adjust in BOX 40
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