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How will the EURO effect your business when reporting for VAT & ECO contributions for overlapping reporting periods covering 2007 and 2008?

The EURO shall effect all businesses reporting VAT and ECO contributions for reporting periods which overlap over two calendar years i.e. 2007 & 2008.

The VAT department shall deliver two returns, one for the months in which the business’s reporting period cover 2007 and the other for the months in which the business’s reporting period cover 2008.

Notwithstanding that the forms are to filled in Maltese Liri for periods in 2007, payments must be made in Euro, at the official rate of:   Lm0.4293 = €1

The 2007 return and the 2008 return shall be considered as separate returns, and the normal rules shall apply.  One of the most common problems which businesses are encountering is how payment may be offset against any refunds in different calendar years.  Payments in 2008 may offset a refund brought forward from 2007 and the difference only should be paid to the VAT department.  Yet, this rule does not apply if a refund of VAT is due in the 2008 period while a payment of VAT is due to the VAT department in 2007 period.  Whereas in normal circumstances businesses would have incorporated both figures together and paid the difference only, in this case payment for the 2007 reporting period would have to be made and a refund under the normal rules would have to be claimed for the 2008 reporting period.

Download the official Eurochangeover leaflet issued by the Value Added Tax Department.

The table below explains the reporting transition:

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