Protecting Your Business From Potential VAT Fraud
It is important for any business to be aware of the potential for implication in VAT fraud, which can occur without your business knowingly involving in such practices.
DBASS recently assisted a client with this very problem and so would like to make you aware of the risks of participating in transactions which could be connected to VAT fraud and to highlight potential consequences should this occur.
Please be aware that Revenue expects every VAT registered business to assess the integrity of its supply chain and customers, as well as the goods involved in these transactions.
The responsibility to carry out these checks is with your business.
Note: You should be aware that you could lose your entitlement to a VAT input credit or you may be liable for Irish VAT on previously zero-rated intracommunity supplies where the related transactions are connected with fraud.
Looking out for the following indicators could reduce your risk of becoming involved in VAT fraud.
Non Irish/EU Companies:
When carrying out transactions with non Irish/EU companies we recommend you follow 3 steps to avoid possible implication of vat fraud:
1.Create A File
At the beginning of your transaction create a new file to hold all of the information pertaining to the transaction and the company you will be dealing with. Ensuring that you organise this information early in the process will assist your business greatly in the event you need to provide evidence to Revenue that you have followed the recommended steps.
2. Carry Out Due Diligence
When entering into business with an unknown party it is recommended that you carry out reasonable due diligence to establish the integrity of your customers/ suppliers and supplies.
This practise should be involved in on an on-going basis to ensure there is no change in the status of your supply chain and the suppliers, customers and goods within it.
Below are some examples of due diligence exercises:
3. Obtain & Print(VAT Check)
Once you have obtained evidence of your VAT check, print this and save within your file with other details of the supplier/transaction in question.
See below a link to Revenue’s recommendations on protecting your business from becoming involved in VAT fraud.