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How is the timing of a taxable transaction determined?
How is the timing of a taxable transaction determined?
In April, the counterparty transferred a VAT advance payment of 18 AZN to our VAT deposit account. The main advance amount of 100 AZN was transferred to our bank account in May. In this case, which month will be considered the time of the taxable transaction — April, when the VAT advance was received, or May?
According to the State Tax Service under the Ministry of Economy, based on Article 166.1 of the Tax Code, unless otherwise specified in this Article, the time of the taxable transaction is the time when payment is made for the supplied goods (works or services).
For the purposes of this Article, "payment" refers to the payment of the VAT-exclusive value or the VAT amount of the supplied goods (works, services).
According to Article 166.6 of the Tax Code, if payment is made before the goods are delivered, the work is performed, or the services are rendered — that is, if the VAT payer receives an advance from the counterparty before delivering the goods, works, or services — the time of the taxable transaction is considered to be the date the advance is paid.
In response to the inquiry, it was stated that in the case described above, the time of the taxable transaction will be considered as April.
In April, the counterparty transferred a VAT advance payment of 18 AZN to our VAT deposit account. The main advance amount of 100 AZN was transferred to our bank account in May. In this case, which month will be considered the time of the taxable transaction — April, when the VAT advance was received, or May?
According to the State Tax Service under the Ministry of Economy, based on Article 166.1 of the Tax Code, unless otherwise specified in this Article, the time of the taxable transaction is the time when payment is made for the supplied goods (works or services).
For the purposes of this Article, "payment" refers to the payment of the VAT-exclusive value or the VAT amount of the supplied goods (works, services).
According to Article 166.6 of the Tax Code, if payment is made before the goods are delivered, the work is performed, or the services are rendered — that is, if the VAT payer receives an advance from the counterparty before delivering the goods, works, or services — the time of the taxable transaction is considered to be the date the advance is paid.
In response to the inquiry, it was stated that in the case described above, the time of the taxable transaction will be considered as April.