What is value added tax?
A value added tax, or VAT, is a more complicated version of a sales tax.
In the US, most states enforce a sales tax on goods and services. For example, if there is a 10% sales tax and you buy a $100 item, you pay $110. The merchant collects your ten dollars and sends it to the government.
In Europe and other parts of the world, VATs are the more common form of consumption tax. A VAT is only charged on the value added and the stage of production or distribution. For example, if there is a 10% VAT and you buy a £100 item, but the merchant paid £50 when they bought the item from the manufacturer, the manufacturer will pay a VAT of £5.
As the name says, the tax is calculated on the amount of value that specific portion of the "distribution chain" added to your cost.
To make things more complicated, VATs are usually completely hidden from the consumer. Prices are quoted to you inclusive of the VAT. The business bears the entire burden of collecting the tax for the state, and you never know about it.
A value-added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price.
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Answer . \nValue Added Tax - a VAT - is a common system of taxation many places. At first it seems similar to, but in reality is very different, to a sales tax. Canada u…ses one in it's system. There are certainly differences, especially in how it is collected, in the systems using it but the basic idea is: Tax the change in value a business endeavor gets from sale of it's product. Unlike the US income tax, tax the real gross mark up rather than the business income net of expenses.\n. \nEssentially, a business buys something for $1, (it could be a combination of purchases to make a product), it then sells that product for $1.20. It added .20 of value to the product. it owes, or collects and pays over, a tax on that amount. The final product actually has tax paid on the entire $1.20, but the parties collecting each portion of that are really responsible for the tax on their piece. Frequently, the tax on the full amount is collected at each sales point, and a credit is taken for the tax paid on the purchase by the one collecting and paying over the amount on the next sale. (Which is why it may appear like a sales tax we are familiar with). In the example above, presuming a 10% VAT, the business would buy the $1.00 item and pay it's supplier $1.10 with VAT. It would sell the item for $1.20 but collect $1.32 with VAT. It would have to pay over that $.12 (like a sales tax collecion here), but instead claims a credit for the $.10 it paid on it's purchase, and only pay over the $.02 difference, which equals 10% of it's $.20 mark up.
Answer . Value-added tax (VAT) is an indirect tax on the supply of goods and services by a person (called a vendor). It is normally charged at a flat rate, based on the a…mount paid for the goods or services. Usually it is included in the price so that the price you see is the price you pay. So, for example, if VAT is 10% and the goods are sold for $100 plus VAT, the selling price will be $110 and the vendor will have to pay the $10 to the Fiscal or Revenue authorities.. If the vendor had bought the goods from someone else for $60 plus VAT (a total of $66), he would be able to claim a VAT refund from the Fiscal or Revenue authorities of this $6. The net effect is that he has paid over $4 ($10 minus $6) on the transaction, hence the term 'value-added'. He has only paid tax on the value added by him.
1. The system of Value Added Tax (VAT) has been implemented, in the State of Maharashtra, w.e.f. 1st April, 2005. 2. The following Acts have been repealed on introduct…ion of VAT: - i. The Bombay Sales Tax Act, 1959, ( BST ) ii. The Maharashtra Sales Tax on the Transfer of Property in goods involved in the execution of Works Contract (Re-enacted) Act, 1989. iii. The Maharashtra Sales Tax on the Transfer of the Right to use any goods for any Purpose Act, ( Lease Tax ) and iv. The Bombay Sales of Motor Spirit Taxation Act, 1958. 3. Thus all transactions of purchase and sales of goods, within the State of Maharashtra, which used to be covered under the above Acts, till 31st March 2005, will now be governed by the Maharashtra Value Added Tax Act, 2002, (MVAT), as amended by Maharashtra Value Added Tax Amendment Bill, 2005. 4. There will be only one tax; i.e., VAT no separate Purchase Tax, Turnover Tax, Resale Tax, Surcharge, Works Contract Tax, and Lease Tax etc. 5. No Concessional Forms such as Form 14, 14A, 14B, 13A and BC Form etc., which used to be there under earlier law. 6. No Resales: All transactions of sales of goods, as well as deemed sale of goods such as Works Contracts, Leases etc., by a dealer, within the State of Maharashtra, are liable to tax under MVAT. 7. Immediate Input Tax Credit , in the month/quarter in which the eligible goods purchased. 8. Composition Schemes for Retailers, Hoteliers, Caterers, Bakers, 2nd Hand Motor Vehicle dealers and Contractors etc. 9. CST will continue for the time being . Thus all transactions of Inter-State Sales, Export, Import, Deemed Export, High Seas sales, Inter-State Branch/Consignment Transfers, Sales in Transit etc. will continue to be governed by the provisions of CST Act. All forms, prescribed under the CST Act, such as Form C, D, E-I, E-II, F and H will continue as it is. The transactions covered by CST Act will remain outside the purview of MVAT. 10. Tax payable by a Dealer : - VAT = Tax on Sales- Input Tax Credit- Credit b/f http://caclub.in
According to Dimaampao (2005) , "taxation is a mode of raising revenue for public purposes. It is not given voluntarily, but is implementing by laws. The people are obliged t…o pay taxes in proportion to their income or some other source. A good example of tax is the Expanded Value-Added Tax (EVAT), which was fully implemented last November 1, 2005. Expanded Value-Added Tax (EVAT) from the definition itself is a value added tax that increases in its scope. It simply means the increase of tax, which is being paid by the people. This is where the government gets the fund for its program for the country. This law extends the tax base to include the fuel, electricity and transport industries. However, the old value added tax (VAT) law covered most food industries. Compared EVAT with the old one, EVAT increased the tax at rate of 12% unlike the VAT, which is 10% only.
Expanded value added tax is a form of sales tax that is assessed onthe sale of goods or services of items imported into thePhilippines. It is considered a consumption tax and …is currently at12 percent.
we have a debate about the 12% value added taw here in the Philippines i just to know that wat are the importance of value added tax to us?
It aims to generate additional government revenue.
The extended value added tax is a new law that was passed in thePhilippines in 2005. This law adds taxes to petroleum, electricity,and other services.
its very simple , instead of attaching fixed taxes upon small valued items, tax is instead value based. this is value added example 10euro x 22%+ total price 12.20
VAT taxes everyone including those less well off, regardless of income and wealth.
probably, or its claimed in expenses Yes, VAT applies to both goods and services. Different countries apply the tax in different ways but, in general, most countries will exe…mpt the following types of services from their VAT: Financial services Healthcare services Education services Some will also extend their exemptions to burial services, water and sewerage services and gambling (on the basis that gambling is usually taxed very highly with excise duties). VAT also has reduced rates and exemptions that relate to goods. Examples of reduced rates normally include food stuffs, books and magazines, exported goods, residential accommodation and, in some rare cases (e.g. the UK), children's clothes. As I said, it is difficult to generalise on this question because each country does its own thing (even within the EU) but hopefully the above will give you a high level guide.