SUBJECT
About Application of VAT for exchange difference.
QUESTION
We take the commodity that are necessary for our company in raw materials and supplies from the first importer at the customs. Therefore, we pay VAT to the importer whom we get the goods from instead of the customs for this cost. The cost is paid to the importer in foreign exchange by becoming indebted. Is the exchange difference subject to VAT? If not subject to VAT, can we process the exchange difference invoiceless and by common consent? As when we negotiated with the importer company, it was stated that since we are not paying VAT for the cost of goods, there wouldn’t be any payments for exchange difference and it is not necessary to invoice the exchange difference and that we can process it mutually. (15.11.2018 09:03)
ANSWER
Exchange difference is subject to VAT.
Source: Ismmo
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