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VAT PAID IN THE ACQUISITION OF FIXED ASSETS WILL BE TREATED AS A TAX

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VAT PAID IN THE ACQUISITION OF FIXED ASSETS WILL BE TREATED AS A TAX

Corporate income tax 

The VAT paid in the importation, formation, building or acquisition of fixed assets would be treated as a tax credit for income tax purposes

 

The Financing Law bill allows the taxpayer to offset as tax credit the VAT paid in the acquisition, import, formation or construction of fixed assets. The VAT regarded as tax credit includes the VAT paid for services rendered.

As general rule, the tax credit might be offset on any of the following taxable years In the event of formed or build fixed assets, the VAT could be offset as tax credit in the taxable year the asset is ready and subject to depreciation.