The Directorate General of Taxes (DGI) reminds VAT-registered individuals and entities that starting July 1, 2024, all transactions must include VAT withholding. This directive requires clients to withhold VAT at the source when paying invoices issued from this date onwards.
In a recent statement, the DGI clarified that the withheld VAT amount should be paid online via the Simpl-TVA e-service on the DGI’s internet portal. Alongside the VAT declaration, a detailed report of the withholding must also be submitted. The necessary guidelines and detailed reporting forms can be downloaded from the Simpl-TVA section of the DGI portal.
For those subject to VAT and procuring from suppliers of equipment and works, they must withhold the total VAT due on taxable transactions with suppliers unless the supplier provides a tax compliance certificate issued by the tax administration within the last six months. This certificate verifies the supplier’s compliance with tax declaration and payment obligations under the General Tax Code (CGI).
In the construction sector, companies sourcing materials such as cement, sand, concrete, iron, plumbing, electricity, and air conditioning must ensure their suppliers’ tax compliance by requesting the tax compliance certificate. If the supplier fails to provide this certificate, companies are required to withhold VAT at the source as stipulated in Article 117-IV of the CGI. The company must then provide the supplier with a document confirming the VAT withholding.
It is important to note that state entities, local authorities, public institutions, and other public entities required to comply with public procurement regulations are exempt from this withholding obligation.
Private entities and individuals whose income is determined under the real net result or simplified net result regimes, and who pay service fees to VAT-registered individuals with a tax compliance certificate, must withhold 75% of the VAT on services listed in Article 89-I (5°, 10°, and 12°) of the CGI and its annexed list B in decree no. 2-06-574. Without the tax compliance certificate, the withholding increases to 100% of the VAT.
Additionally, state entities, local authorities, public institutions, and their subsidiaries must withhold 75% of the VAT on payments to VAT-registered individuals for services specified in Article 89-I (5°, 10°, and 12°) of the CGI listed in annex A of decree no. 2-06-574.
