| Commentary

394 VAT on payments

| Commentary

5: VAT

394 VAT on payments

Unless it is stated specifically that payments pursuant to a distribution agreement in respect of which VAT is due are exclusive of VAT, then such payments will be deemed to be VAT inclusive and will be netted down by the VAT fraction which will reduce the net proceeds of the recipient. All amounts should therefore be stated as being exclusive of any VAT and a contractual obligation should be included in the agreement requiring the payer to account for VAT in addition to any payment, as appropriate.

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