A VAT Act amendment has passed into law that will increase VAT rates for selected services as of 1 January 2004. This is far from being the only important change for taxpayers. Among other important changes that appeared in the Act is the introduction of VAT taxation on the purchase of receivables.
In view of the fact that purchasing receivables has not been subject to VAT in the past, the introduction of taxation on this activity is a bigger blow to factors than the VAT rate increase for selected services. In the case of purchasing receivables, there is a direct charge of 22 per cent VAT.
Why has this new taxation liability drawn no attention?
