The meaning of VAT
I think many have to face when dealing with customers with the question - "Do you work with or without VAT?". I will try to briefly explain the essence of this issue and the essence of the value added tax itself. Understanding this will give you an edge over your competitors who respond without thinking.
Without further ado - immediately to the point. Examples are given taking into account the fact that both the seller and the buyer work with VAT.
Pay attention to how tax is allocated in bills, invoices, deeds, etc. Example:
Total: 100r.
VAT (18%) 18.
Total with VAT: 118r.
Conclusion 1: On the amount charged to the client, you owe the state tax according to the formula (Amount_to_plata / 118) * 18.
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VAT == Value Added Tax. This tax, in fact, is a trade - i.e. for those who buy and resell at a premium. This is regulated by the following method: if you have bought something, then by allocating the amount of VAT from the purchase amount, you can take it "to offset": reduce the tax paid by this amount.
Example: Bought a battery for 50p. sold for 100 rubles - pay the state 9 rubles. tax (18% with 50 rub. mark-up). In the life of the documents it will be like this: you pay for the battery supplier 59r. (50r + 9r. Tax, which we take to offset), sell the client for 118r. (100r + 18r. Tax), 18-9 = 9r. pay into the budget.
Conclusion 2: With the purchased goods, services, the state should return the money to you using the same formula (Amount_to_plata / 118) * 18.
Yes, if you only bought and did not sell, the state will actually return this money to you. Only it does it reluctantly, anticipating the payment of a couple of tax checks.
If you produce goods, but do not trade them, nothing changes. You take into account the VAT on purchased materials and purchased services for their conversion into a product (which is the total cost) and in fact pay 18% just from your mark-up. And if your employees produce the conversion of materials into a product, then you are unlucky - you cannot single out VAT from wages. If your suppliers of materials work without VAT, then you are also not lucky - you cannot accept VAT for such expenses. The fact that you cannot allocate VAT from certain expenses and cannot be set aside for offsetting you from the obligation to fully allocate it upon sale and pay to the budget.
Conclusion 3: If you work with VAT, then you just need your suppliers to work with VAT too.
In other words, if two suppliers offer you goods at the same price, while one of them works with VAT, and the second does not, then the first one is obviously 18% more profitable for you. If you are working with VAT, then when making decisions, consider prices excluded from VAT.
Conclusion 4: If you work without VAT, then give customers prices 18% lower than the competitor who works with VAT to be on equal footing.
ps C on the other hand in general it turns out funny. The overwhelming majority of companies in all their calculations operate on prices without VAT and wind tax on top when selling. In the end, ordinary people buy goods, services, products. Individuals are not VAT payers and can not take VAT to offset (by reducing personal income tax, for example). Here the circuit closes.
pps Tip: work without VAT - use UPDF.
Without further ado - immediately to the point. Examples are given taking into account the fact that both the seller and the buyer work with VAT.
Pay attention to how tax is allocated in bills, invoices, deeds, etc. Example:
Total: 100r.
VAT (18%) 18.
Total with VAT: 118r.
Conclusion 1: On the amount charged to the client, you owe the state tax according to the formula (Amount_to_plata / 118) * 18.
')
VAT == Value Added Tax. This tax, in fact, is a trade - i.e. for those who buy and resell at a premium. This is regulated by the following method: if you have bought something, then by allocating the amount of VAT from the purchase amount, you can take it "to offset": reduce the tax paid by this amount.
Example: Bought a battery for 50p. sold for 100 rubles - pay the state 9 rubles. tax (18% with 50 rub. mark-up). In the life of the documents it will be like this: you pay for the battery supplier 59r. (50r + 9r. Tax, which we take to offset), sell the client for 118r. (100r + 18r. Tax), 18-9 = 9r. pay into the budget.
Conclusion 2: With the purchased goods, services, the state should return the money to you using the same formula (Amount_to_plata / 118) * 18.
Yes, if you only bought and did not sell, the state will actually return this money to you. Only it does it reluctantly, anticipating the payment of a couple of tax checks.
If you produce goods, but do not trade them, nothing changes. You take into account the VAT on purchased materials and purchased services for their conversion into a product (which is the total cost) and in fact pay 18% just from your mark-up. And if your employees produce the conversion of materials into a product, then you are unlucky - you cannot single out VAT from wages. If your suppliers of materials work without VAT, then you are also not lucky - you cannot accept VAT for such expenses. The fact that you cannot allocate VAT from certain expenses and cannot be set aside for offsetting you from the obligation to fully allocate it upon sale and pay to the budget.
Conclusion 3: If you work with VAT, then you just need your suppliers to work with VAT too.
In other words, if two suppliers offer you goods at the same price, while one of them works with VAT, and the second does not, then the first one is obviously 18% more profitable for you. If you are working with VAT, then when making decisions, consider prices excluded from VAT.
Conclusion 4: If you work without VAT, then give customers prices 18% lower than the competitor who works with VAT to be on equal footing.
ps C on the other hand in general it turns out funny. The overwhelming majority of companies in all their calculations operate on prices without VAT and wind tax on top when selling. In the end, ordinary people buy goods, services, products. Individuals are not VAT payers and can not take VAT to offset (by reducing personal income tax, for example). Here the circuit closes.
pps Tip: work without VAT - use UPDF.
Source: https://habr.com/ru/post/88341/
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