The Truth Behind KDV

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
16/04/2008 07:42

I spoke to an advocate yesterday morning who is also a director of two well known Developers/Builders.

The Value Added Tax normally works like this:

Say I started business today and I imported some goods. I pay 16% KDV in accordance with total cost, i.e. cost of goods, transport, Customs Duty, etc. Suppose I paid 1000 YTL in KDV and suppose I made sales worth 2000 YTL, thus collecting 320 YTL in KDV. Next month I do not pay any KDV to the Tax man because they already owe me 1000-320= 680 YTL. Next month if I sell goods and collect say 700 YTL in KDV, then my KDV due is only 20 YTL i.e. 700-680=20 YTL.



Thus builders keep paying KDV as they buy materials etc. for use in the buildings and therefore the tax man owes them lots of money in KDV. As they sell houses (transfer of title deeds) they deduct the KDV from the amount owed to them by the tax man. If they sell too many houses then they will be starting to pay KDV but at the moment most builders are owed KDV by the tax man at the moment. The Builders Union started agitating the government to pay back the money owed to them because of the KDV. So the government came up with a cunning idea: Collect the KDV when the keys are handed over. So the money owing to the builders will diminish and in fact the builders may start paying some KDV to the government. The tax man has asked the builders for a list of houses in their names but keys already handed lover. They will consider these sold and thus start demanding some money from the builders.



The advocate I spoke to told me that they may consider going to the Constitutional Court because it is unfair to presume that the houses are sold prior to transfer of title deeds. I told him that there is no need to go to the Constitutional Court because the directive is not legal anyway and thus they should ignore it. That was news to him.

ismet

Notsoboredhw


Joined: 15/03/2007
Posts: 1254

Message Posted:
16/04/2008 10:08

Thanks Elko for that information its very interesting. Still not sure what to do though. Should we still pay it to our developer or not? Some people on our complex have had two reminders - we havent even had an email about it - I am sure we should have got one though. I like to do things properly and would hate to think I am not doing the right thing by withholding our payment for the time being. What do you think?

Barrovian1



Joined: 16/11/2007
Posts: 95

Message Posted:
16/04/2008 12:19

Hi BHW



The way that I look at it is that KD are sending the bills out in blocks. To be honest I wish that we had not recieved it yet. We too like to do things properly, we payed our Land Register of YTL395, last time we were over there, but I'm reluctant to pay the KDV until I get the title deeds.



Bob

Notsoboredhw


Joined: 15/03/2007
Posts: 1254

Message Posted:
16/04/2008 12:37

Hi Bob

What do we do then because I am so confused over this and I put a message on our forum but no-one seems to be responding to it so I am not sure which direction to go. I think if some people have paid it or are going to pay it and all seems OK then I will go with the majority but I dont know what the majority are doing!!!! Its not easy is it!!! LOL!

Nicky

Barrovian1



Joined: 16/11/2007
Posts: 95

Message Posted:
16/04/2008 14:32

I agree Nicky, it is a poser, I am not sure what to do about it. For some reason I cannot access the TBV forum, whilst I am out here working in the Oman, maybe I am using the incorrect password, any ideas?



Cheers

Bob.

Notsoboredhw


Joined: 15/03/2007
Posts: 1254

Message Posted:
16/04/2008 14:49

Bob I will email you off board and give you Beverley's email address as she is doing that side of things now. Personally I think it could be an issue with MSN and would say keep trying as this does happen sometimes. I think if you were using an incorrect password it would probably tell you - but then again I am sorry I dont know the answer. Will mail you.