VAT is a tax on supplies of goods and services. Therefore, no VAT is due if no supply takes place. As part of business arrangements, businesses will often make payments to compensate each other for any loss, omissions, or other wrongdoings. A question arises whether VAT is due on such payments.
Where payment is not a consideration for a supply, no VAT is due on the payment.
For more information on these services, please contact us: