VAT, what is it?
VAT is an indirect tax on consumption, ie it is fully paid and indirectly by the final consumer. It is characterized by its mode of payment that I split simplifies in the following example: Consider a
Company A sells goods to B at a price of 100 EUR incl VAT at 21%. Company B adds value to the goods purchased for resale to final consumers at a price of 300 EUR + 21% VAT.
I illustrates the diagram below how this tax is levied by the State:
Let's see how to save in the accounts of each of companies A and B, different amounts of VAT from the following diagram:
You can also see practice of accounting records with VAT
- VAT payable = VAT payable - VAT recoverable ( example shown by B 42 = 63-21 )
- The amount of VAT borne by the final consumer is equal to the all VAT due paid by the various intermediaries ( in Example: 42 paid by B to state A + 21 paid by the State VAT = 63 supported by the final consumer ) ==> It is said that VAT is a tax neutral.
TTC = HT + VAT = x + t HT = HT (1 + t) ==> TTC = HT (1 + t)
From this formula we deduce that allows us to obtain Price exc VAT from the price:
HT = Taxes / (1 + t)
With
t: VAT rate
VAT amount VAT
HT: The price excluding VAT
Taxes: The price Total including VAT
Examples:
- We paid an invoice Euro 209.88 including VAT 6%.
What is the price excluding VAT?
It simply applies the second formula:
HT = Taxes / (1 + t) = 209.88 / (1 +0.06) = 198 Euro
- What is the price including VAT after purchasing a camera priced at 450 Euro plus 21% VAT incl
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