Questions: The company donates goods through a public charity organisation, an intermediary agent or a government authority to assist flood victims. Is the company liable to VAT ?
Answer: VAT is exempted pursuant to the Royal Decree No. 239 section 3(4) and No 527 section 6 as well as Clause 2(19) of the Notification of Director-General on VAT No. 40, respectively.
Questions: The company donates goods through a public charity organisation or an intermediary agent to assist flood victims; can the company deduct the input tax paid in purchasing goods in the VAT computation?
Answer: No, however the company can treat such input tax as expenses in its CIT computation pursuant to the Royal Decree No. 243.
Questions: Is the Company liable for VAT for goods and assets that are lost in the flood?
Answer: This case is analogous to that in the Revenue Department’s Ruling No. KorKhor. 0702/2060 dated 1 May 2011. According to the ruling, goods that were in transit and had not been disposed of, sold or transferred to the buyer were sunk at sea. If they cannot be recovered and it can be established that the sinking was caused by natural disaster which is an Act of God and that they were not in the possession of any person, this circumstance is not characterised as a sale of goods pursuant to Section 77/1 (8) of the Revenue Code. Therefore, the Company is not liable for VAT on the said goods.