On Doing tender the tender form has stated that ' The Contract Price should be tax free"
Please clarify the statement is it tax is excluded (the owner have to pay for the tax) or the contractor to bid tender have to absorb all the tax incurred?
Muhamad Nasiruddin bin Yahya
One Response
Tenders and VAT
In the UK it is common in Invitations to Tender to ask the bidder/supplier to quote their prices ‘tax free’. That is to say with out adding on Value Added Tax (VAT) – a type of purchase tax.
The reason for this is that the buyer can then compare prices from all the bidders net of tax (as some suppliers may charge VAT and others not depending on their size, whether they are public sector, and so on).
If you were to win the tender you would be able to charge the prices you quoted plus VAT if appropriate.
Things involving tendered contracts in the EU are often very complicated and it can be worth getting advice from a procurement specialist or someone with experience of putting together this type of tender.
Graham