Changes to the Value Added Tax (VAT) Refund Regulation

As it became necessary to amend the Regulation on the Reimbursement of Value Added Tax (VAT), approved by Decree No. 78/2017, of 28 December, Decree No. of June 23, 2022, which entered into force on the date of its publication.

Under the terms of this legal diploma, Chapter III, which establishes the Special Regime for Regularization of VAT by Companies Operating in the Mining and Oil Sectors, becomes applicable to the prospecting and research, development and production phases.

The companies covered by the referred chapter may ask the Tax Administration to be included in the special regime for the regularization of VAT paid by their suppliers of goods and services provided that, being in the prospecting and research and development phase of the project, they prove that they have carried out respective year the equivalent of 25 million US dollars; and, in the production phase, that 75% of the previous year's sales were destined for exports.

In relation to VAT regularization, companies covered by this chapter, when paying the net amount of the invoice for the purchase of goods and services, must issue a VAT Regularization Note paid, in favor of the supplier, indicating the invoice amount. and the VAT levied on those goods or services. In this way, the VAT Regularization Note gives the supplier the right to regularize, in the periodic declaration, the amount of VAT paid and not paid by the supplier, observing the procedures provided for in the applicable legislation.

However, the use of the Regularization Notes is conditioned to the fact that the respective VAT paid and not paid is recorded simultaneously in the periodic declaration of the purchaser and the supplier, in the same tax period.

For the purposes of authorization to apply the VAT Regularization Regime, companies must submit an application addressed to the General Tax Director by the legal representative or representative of the taxable person, as well as a list of the goods and services that they intend to acquire, indication of the name and Unique Tax Identification Number (NUIT) of the supplier and declaration that the goods and services to be acquired are intended exclusively for the applicant taxable person. If the company operates in the production phase, it must also present the single export document proving that at least 75% of the previous year's sales were destined for exports.

Failure to comply with the requirements set out in the VAT Refund Regulation, as well as the applicable VAT Code rules, may result in the suspension of the framework of the special VAT adjustment regime for a period of 6 months, applying the general refund regime. of VAT, by decision of the Director General of Taxation.

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