Common Intercompany Supplies
Management Charges
Parent charges subsidiary for management services. VAT treatment: Standard-rated 10% unless in same VAT group. Must be at arm's length. Must issue proper tax invoice. Cross-border — reverse charge may apply.
Cost Recharges
Company recharges costs (rent, utilities, staff) to related party. VAT treatment: Acts as agent = disbursement (no VAT). Acts as principal = taxable supply (10% VAT). Documentation determines treatment. NBR scrutinises recharges closely.
VAT Group Solution
If related entities form a VAT group, intercompany supplies are disregarded for VAT. No invoice needed. No VAT charged. Simplifies compliance. But: joint and several liability for all group members.