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An administrative agency enquired whether the transfer and registration fees it pays via the Traffic Department website can be treated as disbursements to avoid applying VAT. The DGT ruled that, provided the requirements of mandate and payment on behalf of the client are met, these fees do not form part of the tax base.
This ruling clarifies the VAT treatment for administrative agencies, confirming that fees paid on behalf of clients under a mandate are disbursements and thus excluded from the agency's taxable turnover.
The tax team reviews your specific situation.
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