Today, every customer who purchases any product in a store is faced with the abbreviation VAT - it is always indicated on the receipt. However, despite the great popularity of this tax, not many buyers understand what VAT is and who pays it. If you look at the reference book, it will give the definition: “value added tax”, but this does not reveal the essence. Therefore, let's try to look at this topic from A to Z.

So, we have given a definition of what VAT is. Who pays it? First of all, enterprises that sell goods at a higher price than the cost of the product. In this case, the tax will be calculated from the difference between the cost of the goods sold and its selling price. In other words: sellers pay VAT from their profits. This is true in theory.

A little history

The abbreviation VAT appeared in the 20s of the XX century. It was then that VAT appeared instead of sales tax. In accordance with the new law, sellers were exempt from paying multiple and similar taxes, but in Russia it came into force in 1992.

Today the rate is 18% for most items of manufactured goods, but there are product categories where VAT on goods is only 10%. This applies to medical and children's products, as well as some food products. If products are exported abroad, they are not subject to tax.

What is VAT and who pays it?

Considering the above, we can draw the following conclusion. VAT on services and goods is paid by the manufacturer or company that provides the services. But in reality, the tax falls on the shoulders of ordinary buyers. Of course, VAT is charged to the seller, and the buyer does not submit reports to the tax office, but in fact it is he who makes the payment. One can argue with this, because legally the seller pays the tax, but in fact you do it when buying products in stores.

Procedure for calculating VAT

When one company orders raw materials from another to produce a product, the first company pays a certain amount of money. Tax is imposed on this amount.

Later, the question of what the cost of the manufactured product will be is decided. This cost is determined by many factors. One of them is the cost of production without VAT. The amount of tax at this stage is also calculated, but it goes as a tax credit.

Then the final cost of the product is calculated at which it will be available in stores to the buyer. At this stage, the final price of the product will be formed: cost of materials + potential profit from sale + excise taxes, etc. As for the calculation of VAT, this tax also goes into the final cost. Manufacturers and sellers take it into account in the price, but the buyer pays for it.

After the goods have been sold and the company has received money, the calculation of profit begins, from which the 18% tax paid by buyers is deducted. This is approximately what the conditional VAT formula looks like. The final amount of all taxes on goods sold by a company is called the tax liability.

Calculation example

For a more detailed understanding of what VAT is and who pays it, let’s look at a simple example.

Let's imagine that you decide to start selling winter shoes. The first stage is searching for a wholesale supplier. For example, you spent 100 thousand rubles on the purchase of goods, purchasing 10 units of products. That is, one pair of shoes cost 10 thousand rubles. In this case, the price of the goods purchased from the supplier already includes an 18% tax. This tax was paid by the supplier and us upon purchase. This amount of 18%, which we overpaid for tax, must subsequently be calculated as an input contribution. When purchasing goods for further sale, we need to prove that we have already paid VAT for wholesale purchases. As proof for the tax authorities, you must present an invoice, invoice or check, which will indicate that VAT on the goods has already been paid.

When determining the final price for sale in a store, we need to deduct tax from the purchased products. From this price, the tax must be calculated in the future. At the final stage, when the final price is formed taking into account the potential profit, 18% tax must be added to the amount received, which will be imposed on the buyer.

Formula

Let us denote the known amount by the letter K. We need to calculate from here the amount of VAT 18%. This means our VAT formula will look like:

VAT = K*18/100

Provided that our amount of money spent is 100 thousand rubles, VAT will be equal to 18,000 rubles (this is 18%).

To calculate the amount including VAT, you need to add to this result the amount we know - 100,000 rubles. This means that the amount including VAT will be equal to 118,000 rubles.

Calculation of the amount excluding VAT

Now that we know the amount with tax (Kn), we can calculate K without it. Let us first recall the formula for calculating the amount with VAT - from it you can get the formula for calculating the amount without VAT.

Kn = K+M*K, where M = 18/100

Another version of the formula is also possible: Kn = K*(1+M).

From this formula it is easy to subtract the value of K we require. The formula will look like:

K = Kn/(1+M) = Kn/(1+0.18) = Kn/1.18

Now you know what VAT is and how to calculate it.

It is worth noting that working with formulas is very problematic, and to simplify the calculation there are special calculators, including online ones. With their help, you can accurately calculate the tax by simply entering the initially known parameters. This is approximately the procedure for calculating VAT.

Types of tax

There are 3 criteria according to which the procedure for calculating VAT is carried out:

1. Zero rate. The tax is not levied on the sale of space goods, as well as on the export of any goods, during the transportation of oil and gas and the export of precious metals. There is a complete list of goods that fall under the zero VAT rate - they are described in Article 164 of the Tax Code of the Russian Federation.
2. Rate 10%. Applies to the sale of food products (vegetables, milk, meat, etc.). This also applies to children's products, medicines and scientific literature.
3. VAT 18%. This is the most common tax, which covers absolutely all goods not included in the first two categories.

Please note that VAT is charged not only on the direct sale of goods, but also on the import of any product into the territory of the Russian Federation. Work related to the construction of buildings, for which a construction contract is not concluded, is also subject to this tax.

Processes that are not subject to this tax

VAT on services does not always apply. For example, when providing work to state-owned enterprises that will be carried out within the limits of the duties assigned to them, no tax is charged. It is also not charged for investments, for the provision of funds to companies on a non-profit basis, and for the purchase and development of state-owned enterprises.

Calculation

There are two options according to which VAT can be calculated:

1. Subtraction. The entire amount of proceeds is subject to tax, and the tax paid at the time of purchase of raw materials is deducted from the amount received.
2. Addition. When the tax amount is the sum of the added values ​​of each type of product sold.

The first method of calculating VAT is most often used due to its simplicity. The fact is that keeping separate records for each type of product sold is quite difficult, although sometimes this is the only method appropriate for some companies due to the specific nature of their work.

Reporting

So, we have already figured out what VAT is and who pays it. Now we can talk about what kind of reporting needs to be submitted to the tax office.

Reporting must be provided every quarter, and it is filled out using a special form. At the same time, the reporting deadline is strict - until the 25th of the next month. If there are delays, the company may face fines.

You can also send reports by mail. But it is necessary to take into account that in this case the reporting date will be the number that appears on the stamp in the registered letter.

For example, if you sent a registered letter on the 20th, and the tax office received it on the 28th, then there will be no fine in this case, since the stamp will indicate the 20th.

Tax deductions

Tax deductions are the amount of payments that were presented for payment by the supplier and on which the amount of tax has already been accrued. There are also rules here that businesses must follow. The amount of VAT can be deducted only if three conditions are met:

1. Products that were purchased for sale were already subject to VAT.
2. The received raw materials or products have undergone accounting.
3. The company has all the primary documentation, and the invoice is drawn up in accordance with all the rules.

If these conditions are met by the company, then after the tax period the company can deduct the amount of VAT, but only if the products were already subject to VAT.

What is an invoice?

This document contains information about the price of the product excluding VAT and the total cost including VAT. This document must be provided by the supplier, and it must be filed in a special accounting journal and noted in the sales book.

The main difficulty in maintaining an invoice is that the responsibility for issuing it rests largely with the counterparty with whom the taxpayer cooperates. And if he fills something out incorrectly, during the inspection the inspector may cancel the deductions and additionally charge VAT. Therefore, a counterparty’s mistake may result in additional expenses for the taxpayer. This means that you need to require the supplier to accurately fill out documents.

Conclusion

So, the main conclusions that need to be drawn from this article:

1. In practice, VAT is paid by the buyer, although in theory it is assumed that it falls on the shoulders of the seller.
2. Calculating VAT is quite difficult without specialized tools. Therefore, ideally, you should use calculators to correctly calculate tax and maintain the VAT database. But the principle of calculation must be understood.
3. For some services, VAT is not charged. Also, no tax is levied on the export of goods.
4. Depending on the products sold, the tax amount may vary. For example, when selling medicines and food products, VAT is only 10%.
5. Filing reports is the most important stage of cooperation with the tax office. Reports must be submitted by the 25th of the month. Otherwise, fines cannot be avoided. When sending a letter by mail, you don’t have to worry that the letter will arrive at the tax office after the 25th, since in this case the sending time on the stamp of the registered letter is taken into account.
6. When collaborating with a counterparty who will supply you with products, require him to fill out the invoice in a timely and correct manner. If mistakes are made, the tax inspector has the right to charge additional VAT.
7. All purchased raw materials for subsequent sale must be “run” through accounting and the invoice must be drawn up correctly. This way you can get a tax deduction.

Now we more or less understand where this tax comes from, how it is compiled and, in general, who should pay VAT. Of course, everything is described here quite superficially and primitively, but the topic of value added tax itself is more extensive and complex, and it is now almost impossible to present all the nuances.

The cost excluding VAT for the sale of goods is indicated only in certain cases. The presence of VAT depends on whether the goods are subject to VAT and whether the seller is a payer of this tax. As a general rule, the cost of goods should be indicated including VAT. However, in some cases, the seller may indicate the price excluding VAT and not issue invoices. When the cost of goods is indicated with VAT (excluding VAT), we will consider in this article.

When the price is indicated including tax

As a general rule, when selling goods, works, or services, the seller must present the amount of tax to the buyer for payment in addition to their price (clause 1 of Article 168 of the Tax Code of the Russian Federation).

We talk in more detail about what is subject to VAT in this section.

To do this, the price of goods is multiplied by the tax rate (20 or 10%). As a result, the buyer is presented with the amount of tax in the cost of goods.

In settlement and primary documents, in invoices, the corresponding amount of tax must be highlighted as a separate line (clause 4 of Article 168 of the Tax Code of the Russian Federation).

At the same time, there are situations when the contract does not specify whether the price includes VAT or not. In order to avoid disputes with tax authorities and your partner about the final price of the contract, we advise you to pay special attention to this condition. On this issue there is an opinion of the Plenum of the Supreme Arbitration Court of the Russian Federation (clause 17 of the resolution dated May 30, 2014 No. 33). The judges indicated that if the contract does not indicate the inclusion of VAT in the price, then the amount of tax is allocated by the seller from the price established in the contract. This position is beneficial to the buyer, since he is protected from the seller’s demands to pay VAT above the agreed price. At the same time, this position is useful for the seller in case of claims from the tax authorities - VAT does not need to be paid at his own expense in excess of the contract price.

The seller is exempt from paying VAT in accordance with Art. 145 Tax Code of the Russian Federation

VAT-exempt companies can list the price of their goods excluding VAT.

Small organizations can receive VAT exemption. This category includes companies whose revenue for the 3 previous consecutive calendar months does not exceed 2 million rubles. excluding VAT. To obtain an exemption, you must submit a special notification to the tax office.

Read how to get a VAT exemption in 2019.

The seller applies a special regime

Organizations under a special regime (STS, UTII, Unified Agricultural Tax, PSN) can indicate the cost of goods sold excluding VAT. They are exempt from the obligation to calculate and pay VAT.

At the same time, if such a company nevertheless issues a VAT invoice, it will have to pay tax to the budget (clause 5 of Article 173 of the Tax Code of the Russian Federation).

Read more about VAT during simplification.

Goods, works, services not subject to VAT

The Tax Code of the Russian Federation provides for VAT benefits for certain types of goods, works, and services. For such transactions, organizations indicate the cost without VAT. The list of preferential transactions is given in Art. 149 of the Tax Code of the Russian Federation. For example, sales of:

• medical goods;
• educational services;
• passenger transportation services;
• scrap of ferrous and non-ferrous metals;
• banking operations, etc.

For more details, see the materials:

• “Transactions not subject to VAT: types and features” ;
• “What goods that are not subject to VAT are enshrined in the Tax Code?” .

Results

As a general rule, when selling goods, works, or services, the seller must present the amount of VAT to the buyer for payment in addition to their price. Only VAT non-payers, as well as persons who sell tax-free goods (work, services), are exempt from this obligation. It must be remembered that if a company that does not have to charge the buyer with VAT nevertheless issues an invoice with VAT, then it will have to pay tax to the budget. This is directly stated in paragraph 5 of Art. 173 Tax Code of the Russian Federation.

In this article we will look at what value added tax (VAT) is, what its essence is, and why it is needed. Who is the VAT payer and in what cases is an organization exempt from paying it?

The Tax Code of the Russian Federation has an entire chapter devoted to value added tax - Chapter 21. This tax is the main source of budget formation and creates a significant burden for commercial organizations. often raises many questions among accountants and business managers. Of course, we will not analyze all the issues within the framework of this article, but will first focus on general issues relating to this type of tax. What is it, why, who pays, who doesn’t pay - these are the main questions that are discussed below.

In the near future we will deal with its calculation, deductions and postings.

Why is VAT needed (concept)

An enterprise, when selling its products, goods, services, is required to pay value added tax.

And the following situation arises:

Every time a company makes a sale, it collects VAT from its customers in order to then pay it to the budget.

However, every time a business buys something from its suppliers, acting as a buyer, it also pays VAT to its suppliers as part of the purchase price.

At the same time, the tax that the enterprise is obliged to pay on goods sold to the budget is reduced by the amount of VAT that the enterprise paid to its suppliers, that is, the tax burden on the organization is reduced.

In accounting there is account 68 “Calculations for taxes and fees”. A separate sub-account called “VAT” is opened on this account, which will account for all calculations for value added tax.

VAT, which the company must pay on sales, is taken into account in the debit of account 90 “Sales”, subaccount 3 (we partially touched on this issue when we examined it) in correspondence with account 68, and a posting is made D90.3 K68.VAT. The amount for which this posting is made is subject to payment to the budget.

The tax that is levied on a company when purchasing something is allocated as a debit to the account. 19 “Value added tax on acquired assets” (we also partially touched on this when we considered the topic). The tax allocated to account 19 is subject to reimbursement from the budget. Accumulated by debit account. 19 VAT is written off from the loan to the debit of the account. 68, wiring D68.VAT K19, in accounting language, this posting means that.

It turns out that the loan account. 68 collects all VAT accrued on sales and intended for payment to the budget. By debit account 68 – collected by suppliers from the enterprise. As mentioned above, the final VAT that the organization will pay to the budget will be equal to the difference between the credit and debit of the account. 68.

If on account 68 there is a credit balance, then the enterprise must pay tax to the budget; if there is a debit balance, then the state remains indebted to the enterprise.

Who is the VAT payer?

Taxpayers are listed in Article 143 of the Tax Code of the Russian Federation:

• organizations (legal entities);
• Individual entrepreneur (individuals);
• persons carrying out activities to move goods across the customs border (import, export).

I would like to note that not all enterprises are required to pay VAT to the budget. There are certain conditions that allow businesses to legally avoid paying value added tax.

VAT exemption

Under certain circumstances, organizations and individual entrepreneurs may be exempt from paying this type of tax.

Organizations are exempt from VAT if:

1. The amount of proceeds from sales excluding tax for the last three months did not exceed 2 million rubles. (to be released, the organization must submit a written notification (form approved by the Ministry of Finance of the Russian Federation) and a number of documents given in paragraph 6 of Article 145 of the Tax Code of the Russian Federation). Exemption from VAT is given for a period of 12 months, after which the organization must confirm its right to exemption or waive this right. Moreover, at the end of these 12 months, the organization must confirm with relevant documents that during the year, revenue for each three consecutive months did not exceed 2 million rubles. If at some point the amount of revenue exceeds the specified amount, then the organization loses its exemption from VAT.
2. Conducts transactions that are not subject to taxation. The list of these operations is given in Art. 149 Tax Code of the Russian Federation,
3. Special taxation systems are used (the system of a single tax on imputed income, a single agricultural tax).

If an organization meets any of the three points and is exempt from paying VAT, then it does not collect this tax from buyers, and the VAT collected from them by suppliers is included in the cost of purchased goods and services.

Accordingly, accounts 90.3 and 19 will be missing in accounting.

If an organization is a VAT payer, then it is obliged to issue invoices to its customers and accept them from suppliers. An invoice is an important document presented by the seller to the buyer, on the basis of which it is possible to allocate VAT and direct it to deduction. All value added tax payers are required to keep a log of invoices received and issued, as well as a purchase ledger and a sales ledger.

The forms of these three documents have been updated, the new forms were approved by Decree of the Government of the Russian Federation No. 735 of July 30, 2014.

The supplier is obliged to provide an invoice within 5 days from the date of shipment. If there is no invoice, then the organization cannot separate VAT from the amount and send it for deduction.

Payment of VAT

The tax period for calculation is a quarter (Article 163 of the Tax Code of the Russian Federation).

The tax is paid in three equal amounts over the next three months after the reporting quarter. For example, for the first quarter (from January to March), VAT is paid on April 20, May 20, June 20 in three equal amounts equal to 1/3 of the total amount (Article 174 of the Tax Code of the Russian Federation). Since 2015, the deadlines for paying VAT have changed, more details.

A calculator for calculating VAT online is located.

Note! You can read about what has changed regarding VAT in 2015.

Today, each of us, when making any transaction or purchase, is faced with the abbreviation “VAT”. But despite the popularity of these letters, few people understand and wonder what they mean and where they come from. Looking at the directory, the interested person will see that VAT is a value added tax. From these words little will be clear to the common man. Therefore, today we will analyze this topic piece by piece.

First of all VAT is subject to all businesses with added market value. Simply put, businesses that sell goods or services at a higher price than the cost of the product. In this case, the tax is calculated from the difference between the cost of the product and the subsequent selling price, that is, revenue.

History of appearance

This abbreviation first appeared back in the 20s, when VAT replaced the sales tax, in which payment was made on all revenue. The changes were supposed to free production from the same type, multiple payments and begin to take into account not revenue, but potential profit. But the tax became effective in our country only in 1992.

At the moment VAT rate in Russia it is equal to 18% for most of the products produced. But there are certain categories of goods for which VAT is 10%. Such goods include medicines, certain food products and children's products. Products exported abroad are not subject to tax.

Who pays

From the above, one could conclude that the tax falls on the shoulders of producers and nothing more. However, in the end the VAT is paid by the ordinary buyer. Of course, the company submits a tax return, but in the end the tax is paid by the buyer.

Below we will look at a visual example of constructing a VAT chain:

• When one enterprise orders from another the raw materials necessary for the production of products, it pays the supplier an amount on which a tax is imposed.
• Subsequently, the question of the future value of the manufactured goods begins to be resolved. It consists of factors such as the cost of the product, that is, the amount spent on purchasing materials for its manufacture is calculated without VAT. The tax amount is also calculated at this stage, but is already used as a tax credit.
• Next, comes the stage of forming the final cost of the product, at which buyers will purchase it at points of sale. What will the final cost of the product be formed from: cost, share of profit from subsequent sales, calculation, etc. Well, where would we be without VAT? It is also added to the final price, but it is already paid by the buyer.
• When the company has sold goods for a certain amount and received revenue, the calculation of its size begins, minus the 18% tax paid by the buyer. The final amount is noted as a tax liability.

To learn what Value Added Tax is, watch the following video tutorial:

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Calculation example

To better understand what VAT is, let’s look at it next example.

We decided to start selling jackets at a retail outlet. At the first stage, we will need to find a supplier who will supply us with these jackets in bulk.

Let's assume that purchased goods in the amount of 100,000 rubles on the basis that one unit of goods costs 10,000 rubles, that is, we purchased 10 jackets from the supplier for 10,000 rubles each. In this case, the price of the purchased goods will already include a tax of 18% (it was paid by the supplier), and upon purchase, we will also pay it. We will calculate the amount overpaid for VAT as an incoming contribution or deduction.

By purchasing, for further resale We will need to prove that the materials were paid for with VAT included in the amount. As proof for the tax office, we must have it on hand, or where it says about the tax paid.

Before formulate the final price, at which we will sell the goods, we must first deduct the value added tax from the purchased products. The tax will be calculated from the amount received in the future.

Calculation formulas

For example, let us denote a known amount as K. We need to calculate the amount of VAT 18%. The formula will look like this:

VAT = K*18/100

Example! Let's take the amount of 100,000 rubles.

VAT will be equal to:

VAT = 100000*18/100 = 18,000

Calculation of the amount including VAT

For example, we know the amount K. We need to calculate Kn - the amount including VAT.

The formula will look like this:

Kn = K+K*18/100

Kn = K*(1+18/100)=K*1.18

We take the same amount of 100,000 rubles and calculate the amount including VAT:

Kn = 100 00*1.18=118

Formula for calculating the amount excluding VAT

So, we know the amount including VAT - Kn. You need to calculate K – excluding VAT. To begin with, we recall the formula by which we calculated the amount including VAT and from it we obtain the formula for calculating the amount without tax.

Let's denote M=18/100, we get:

Kn = K*(1+M)

Hence:

K = Kn / (1 + M) = Kn / (1 + 0.18) = Kn / 1.18

Of course, working with formulas is quite problematic. To simplify all calculations, there are online VAT calculators, with which you can accurately and quickly obtain the necessary figures.

The rules for calculating this tax are outlined in this video:

Types of this tax

In accordance with tax legislation, VAT is calculated according to three criteria:

• Zero rate. The tax is not levied on the export of goods, the sale of space goods, the transportation of gas and oil, the export of precious metals, etc. A complete list of goods eligible for 0% VAT can be found in Article 164 of the Tax Code of the Russian Federation.
• Rate 10% used when selling a number of food products (milk, vegetables, meat, etc.). Children's goods (clothing, cribs, strollers, etc.). Also, 10% VAT is applied on the sale of medicines, periodicals, scientific and educational literature.
• VAT 18% the most common tax that applies to all goods and services that do not qualify for the first two rates (0% and 10%).

Which transactions require VAT to be charged?

1. Import of any products to the Russian Federation.
2. All work related to the construction of buildings where a construction contract is not concluded.
3. Transfer of services and products for own use (in the territory of the Russian Federation), the costs of which are not taken into account when calculating VAT.

Processes not subject to this tax

1. Provision of work by public authorities within the limits of the duties assigned to them.
2. Purchase and further privatization of municipal and state enterprises.
3. Various types of investments.
4. Sale of land plots.
5. Providing money to organizations on a non-profit basis.

Accrual methods

Currently, VAT can be calculated two options:

1. Subtraction. When the entire amount of revenue is taxed, and the amount of VAT that was paid at the time of purchase of materials is subtracted from the amount received.
2. Addition. When the tax is charged at an approved rate from the entire tax base, which consists of added values ​​for each type of product sold.

The first method of calculating VAT is used more often, due to the fact that it is quite difficult to keep separate records for each type of product.

Reporting

So, we figured out what VAT is and who pays it. Now let's talk about how reporting should be submitted to the tax office.

Reporting is provided every quarter, filled out using a special form. The deadlines within which documents must be submitted are quite strict - before the 25th of the next month.

If there are delays, the company may be subject to penalties. When sending by mail, you need to take into account that the date of filing the report will be the number on the stamp in the registered letter.

For example, you came to the post office on the 19th and sent a registered letter, but it only arrived at the tax office on the 28th. In this case, there will be no fines, since the letter was marked with the 19th date when sent.

Tax deductions

Tax deductions is the amount of tax payments presented for payment by the supplier and by which the total amount of tax planned for payment to the budget was reduced.

There are also rules that businesses follow. They can deduct the VAT amount if only three conditions are met:

1. Products purchased for subsequent sale are subject to VAT.
2. The company has all the necessary primary documents and an invoice issued according to the rules.
3. The received products have undergone accounting.

If these three conditions have been met, then at the end of the tax period the company can deduct the entire amount of payments (of course, if all transactions carried out were subject to VAT).

Invoice

This is the document that contains all necessary information about the cost of the goods excluding VAT and the total amount including tax. The supplier must provide the invoice to the buyer upon shipment of the goods, and later 5 days.

The main difficulty in preparing an invoice is that this document is drawn up not by the taxpayer himself, but by the counterparty with whom the cooperation takes place. If something is filled out incorrectly, then during the inspection the inspector may cancel all deductions and charge additional VAT. Therefore, it is necessary to require the counterparty to accurately fill out documents.

So, now we understand what VAT is, where it comes from, who pays it and how calculations occur. Of course, this topic is quite complex, and it is impossible to present all the nuances and rules in one article. But we figured out the main task, namely, what VAT is.

For information on the specifics of Value Added Tax reimbursement, watch the video.
Part 1:

Hello dear readers of the site! Whenever the buyer pays for the purchased product, in the cash receipt received from the seller, you can see an additional line containing incomprehensible information: “VAT amount 10%, VAT amount 18%.”

What does this mean? Any additional fee or trade markup?

I propose to try to understand these seemingly complex issues in the simplest possible terms. What is VAT, who needs it and why, how does it affect our wallets.

How VAT is deciphered, the history of the tax

VAT is an abbreviation for “value added tax.”

In other words, it is the amount of tax that the seller must pay to the government on the difference between the price of the product at which the final consumer purchased it and the price that the retailer paid to the wholesale supplier.

In the past, instead of this fee, there was a tax on the sales price of the goods, without taking into account the funds that the seller spent on purchasing the goods from the supplier or manufacturer.

The application of sales duties led to repeated taxation in the process of production, storage, and delivery of goods. When the same tax is levied several times on the same product, the result is a consistent increase in the cost of the product to the end consumer.

It is clear that such a situation does not contribute to economic development, leads to increased inflation and stimulates participants in the production and commercial chain to search for ways to evade taxes.

In order to stimulate the economy and minimize tax violations, Maurice Loret, director of the Directorate of Taxes and Duties of the Ministry of Economy of the Republic of France, in 1954 proposed an improved version of the sales tax - value added tax.

A significant advantage of BAT is that each participant in the economic process pays duty only specifically on added value. That is, the amount that the seller adds to his own costs for purchasing the goods.

Thus, VAT eliminates multiple taxation, reduces the tax burden on entrepreneurs, and contributes to more complete tax collection. After all, even if one of the participants in the trade chain manages to evade paying VAT, other payers will be forced to pay off the arrears.

In our country, value added tax was first introduced in 1992. The procedure for calculating VAT is currently explained in Chapter 21 of the Tax Code of the Russian Federation.

• Note. Although the receipt states that the final buyer pays the full amount of VAT in accordance with the sale price of the goods, it should not be assumed that the consumer bears the entire burden of this charge.

Retailers can independently regulate the ratio of wholesale and retail prices in such a way as to achieve optimal sales volumes.

So the end buyer will not always pay the full amount of tax; the retailer can take on part of the mandatory payments to the state.

Why is this tax not in the USA?

The value added duty in the modern world is accepted in most countries, although the rates and methods of its calculation vary significantly.

In the United States of America, VAT does not apply; the old sales tax continues to apply.

• It's all about Anglo-Saxon traditionalism and the specific structure of the North American state.

US legislators and trade regulators motivate the refusal to maintain VAT. in that “the rules of the game cannot be changed in the process, as this creates obstacles for business.”

• An additional reason for the complexity of the transition to VAT in the United States is that this country consists of 50 states, which are effectively separate states with a high level of independence from the federation.

Each American state has its own rates and methods of calculating sales tax.

• Another reason is that US law assumes that paying taxes is the responsibility of the citizen himself.

Each US resident is responsible for the calculation and payment of all applicable taxes.

Therefore, the tax apparatus in the United States does not have sufficient administrative resources to fully monitor and control the payment of the more complex value added tax.

Some limited oversight by tax authorities in the United States is offset by very severe penalties for tax violations and crimes.

• The last reason is that the US has a relatively higher tax on personal income.

So the state receives the bulk of tax revenues from the high salaries of American workers and employees by global standards.

Formula for calculating VAT at a rate of 18 or 10 percent

In our country, VAT is set at 18% on most goods. For some categories of socially significant goods and services, VAT has a reduced rate of 10%.

In some cases, in order to increase the economic efficiency of production and commercial activities, N.D.S. and is not charged at all.

However, knowledge of such subtleties is the prerogative of accountants of commercial enterprises and organizations.

The average consumer is more interested in knowing exactly how much money do I overpay for purchasing goods?, subject to value added tax?

For example, the total cost of a purchase is known from a cash receipt; let’s denote it with the letter “P.” Then the amount of tax paid can be calculated using the following formulas:

• VAT = P*18/118 (at a rate of 18%).
• VAT = P*10/110 (at a rate of 10%).

If we know the price of the product without tax (denoted by the letter “C”), then we calculate using the following formulas:

• VAT = C*0.18
• VAT = C*0.10

Knowing the price of the product without tax and the VAT rate, we can calculate how much we will have to pay in the store for the purchase:

• P = C + VAT
• P = C + C*0.18
• P = C + C*0.10

However, we have forgotten that we live in the 21st century and any complex calculations can be simplified and automated using Internet services.

How to calculate tax using an online calculator

There are quite a lot of such services in RuNet. Let's let's visit one of them and let's see how to use it.

The interface is quite intuitive.

The following functions are available:

• Add VAT to the base cost of the goods.
• Allocate VAT from the final price.
• The button with a red cross clears the forms for a new calculation.

As an example, let's perform control calculations.

Here we calculated the selling price of the goods for 200 rubles.

• VAT at a rate of 18% was 30 rubles 51 kopecks.
• The starting price without BAT is 169 rubles 49 kopecks.

The second option demonstrates the calculation of VAT on the initial cost.

• The amount with VAT at a rate of 18% was 236 rubles.
• VAT is 36 rubles.

If necessary, the VAT rate can be adjusted in the appropriate field.

That’s all, as it became known from the media, at the beginning of 2019 the VAT rate is expected to increase. on most products up to 20%.

In parallel, for some categories of socially significant goods and services, this tax can be canceled or significantly reduced.