The first of two Discounted VAT Rate Days (DVRD’s) is (today) Friday December 15th.

On DVRD’s, approved businesses will be allowed to charge VAT at the rate of 5% on the sale of goods inclusive of vehicles. In relation to vehicle purchases, VAT will be exempt on the first $50,000 only. However, any cost in excess of the $50,000 will attract the usual 17% VAT.

In addition, according to the Inland Revenue Department (IRD), “persons receiving Duty Free concession on a vehicle will NOT be eligible for the DVR Day VAT exemption on the first $50,000.

As a consequence, persons receiving Duty Free concession on vehicles will be required to pay the standard rate of 17% VAT upon purchasing a vehicle at Duty Free on the DVR Days. Tangible items that are presently subject to 17% VAT will qualify for the discounted VAT Rate. Non- tangible items such as the supply of professional services will continue to be subject to the 17% VAT rate.

But what about items sold on Credit and Hire Purchase, are they eligible for the reduced rate? Goods sold under a credit or hire purchase agreement will qualify for the reduced rate of 5% if the sale is concluded on the DVR Days. The 2nd DVRD is scheduled for Saturday Dec. 16th.