The status of an unreliable payer has been extended with that of an unreliable person (newly defined in Section 106aa of the VAT Act) within the VAT Act amendmet, which came into effect on 1 July, 2017.
The position is to enable the VAT administrator to identify any physical person or legal entity, not necessarily a VAT payer, that has failed to meet their obligation related to VAT administration which has made them an unreliable payer.
Also, the amendment aims to prevent purposive VAT registration cancellation by businesses made in order to rid the label of an unreliable payer – such entity would instantly become an unreliable person and this status remains valid for any further possible VAT registration cancellation.
The responsibility of the due VAT payment while doing business with unreliable is to be assumed by the customer in the similar fashion as when dealing with unreliable payers.
The tax administrator will release a revised list of unreliable persons on a regular basis; to be removed from the register is to be decided upon by the tax office, which will evaluate whether the reasons for having been included there may be dismissed; no sooner, however, than a 12-month period has passed.