A business expense does not automatically carry a VAT right. For every line, connect the purchase to a qualifying output, hold regular evidence in the right name, respect deduction timing and clear the exclusions.
Five gates
- Is the business taxable for the operation?
- Does the purchase serve a qualifying output?
- Is the invoice regular and in the beneficiary’s name?
- Has payment or customs receipt created the right?
- Does an exclusion, prorata or adjustment apply?
1. Start with the sale funded by the purchase
Input VAT is deductible when charged on price elements of a taxable or qualifying operation. One purchase may serve taxable, exempt-without-deduction or private operations, requiring allocation and possibly a prorata.
| Use | First conclusion |
|---|---|
| Taxable sales | possible right |
| Exempt with deduction | possible right under conditions |
| Exempt without deduction | normally limited right |
| Private use | no right for that part |
| Mixed use | allocation/prorata needed |
An entry being useful or accounted for is insufficient: VAT destination is the first test.
2. Check evidence and timing
The right notably arises on full or partial payment of an invoice or statement in the beneficiary’s name, or the customs receipt, and must be exercised within a maximum year from the month or quarter it arose.
- Check supplier, beneficiary and fields.
- Match good/service to activity.
- Evidence payment and date.
- Calculate only the paid part where applicable.
- Enter deduction in the correct period.
- Track pending invoices before the deadline.
An accounting entry at year-end does not replace payment or the document creating the right.
3. Run through exclusions
The CGI notably excludes VAT on liberalities and mission, reception or representation costs, as well as non-compliant invoices. Payment-method restrictions also apply above statutory thresholds.
- Do not deduct gifts/liberalities without a specific basis.
- Isolate meals, hotels, reception and representation.
- Check any material cash payment.
- Treat vehicles, fuel and particular goods under their rules.
- Document an exception rather than generalising.
This is not permission for everything absent from the list: all five gates still apply.
Do not confuse deductible expense with recoverable VAT
An expense can qualify for profit tax while its VAT is excluded, or vice versa depending on nature and regime. Use two control columns.
4. Track assets and corrections
For depreciable fixed assets used in qualifying operations, article 102 controls deduction and adjustments. Retention periods notably run 60 months for movable goods and ten years for immovable goods.
- Acquisition: invoice, payment, allocation and record
- Use change: recalculate the share
- Early disposal: test adjustment
- Loss: evidence and treatment
- Tracking: schedule by asset
BelloPOS may connect a purchase and stock movement, but does not validate deduction or maintain the tax asset schedule.
Mistakes to avoid
- Deducting because it is professional.
- Invoice in the manager’s name.
- Deducting before payment without basis.
- Missing the one-year limit.
- Ignoring meals and representation.
- Paying cash without threshold test.
- Missing an asset adjustment.
Frequently asked questions
Does an invoice in the manager’s name qualify?
The CGI requires an invoice or statement in the beneficiary’s name; correct the identity when the company acquired it.
What is the exercise deadline?
A maximum year from the month or quarter when the right arose.
Do meal costs qualify?
Mission, reception and representation costs are among exclusions; analyse the exact expense.
How is mixed use handled?
Allocate use or apply the required prorata/adjustment with a documented file.
Can BelloPOS tell whether VAT is recoverable?
No. It retains purchase data; the decision requires invoice, regime, use and payment.
What to take away
Recoverable VAT is not a checkbox on an invoice: it is the documented result of testing output, purchase, evidence, payment and exclusions.
Sources
The figures and rules quoted above come from these pages, read on the date given in the article.
Connect each purchase to its use
Retain supplier, receipt, payment and corresponding movement to accelerate invoice testing.
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