VAT Classification Checklist for New Products and Services

Describe the offering

Capture specifications, ingredients or functions, delivery method, customer, geography, contract, warranty, bundled components and HS code for goods where relevant.

Classify each component

Test scope, standard rate, Schedule 1 exemption and Schedule 2 zero rating for each material component. Record why one component is ancillary or separately priced.

Connect operational consequences

Set price as VAT-inclusive or exclusive, choose invoice type, configure accounting code, determine input-credit treatment and include turnover in registration monitoring.

Approve and recheck

Record reviewer, source version and effective date. Recheck after an Economic Act, Gazette change, product redesign or contract change.

A practical control to retain

Attach the approved classification sheet to the product master and prevent sales from selecting another VAT code without review. Procurement should use the same description when checking input VAT and imports. A classification is versioned: retain the old decision for historical invoices and set a clear effective date for the new one. This avoids retroactively applying a current Schedule to a transaction governed by an earlier version.

For product managers, founders, accountants and tax reviewers, the sign-off should answer the guide's four core questions in writing: Classification should happen before launch. Commercial names are not legal descriptions. Bundles may need component analysis. Schedule changes need version control. Record who checked those answers, the source date and any unresolved fact. If a later invoice, contract or Schedule amendment changes one answer, reopen the classification or return treatment instead of silently carrying the old assumption forward.