How to review commercial contracts for VAT purposes

Conducting a proper review of any commercial contract for VAT purposes has two essential stages: first, determining the VAT treatment of any supplies of goods or services to be made pursuant to the contract; and, second, determining how the contract allocates the liability for any such VAT between the contracting parties, and whether it matches your client’s requirements. When reviewing a contract to determine the VAT treatment of a supply of goods or services, the following questions should be considered: what is being supplied; who is making the supply; where is the supply made; when is the supply made; what is the value of the supply; and is the supply made between members of a VAT group.