2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
VAT - what is it? Our article will be devoted to this topic, in which we will talk about why this tax was established, and describe its features. Value added tax is indirect and is one of the most important ways to replenish the Russian state treasury. Everyone who wants to do business should know about it in detail. So, let's start studying VAT!
What is this?
The so-called added value is present at virtually all stages of the production of goods: from the very beginning of their manufacture to the moment of their purchase by the consumer.
The company pays the tax on this most additional margin from its own value increase. In simple terms, it is calculated as follows: the proceeds from the sale of goods minus the cost of raw materials for production (if it was purchased from a third-party seller). There is also a list of goods and services exempt from this burden.
The business is required to invoice its customers andvalue added tax to buyers, but the company itself does not receive it - this tax goes entirely to the state treasury.
VAT - what is it in terms of calculations?
In accordance with the laws of our country, value added tax is calculated as follows: "tax at the rate with the tax base" minus "the amount of tax deductions".
Tax deduction is the sum of all taxes paid on the purchase of all necessary materials and services for the operation of the company (subject to VAT).
VAT is calculated separately for each rate, excluding those types of goods and services that are not subject to taxation.
What VAT is accepted today on the territory of the Russian Federation?
In 1992, VAT was introduced in Russia. Over the years, its rate has changed several times and even reached 28 percent. In 2004, the Government decided to reduce it to 18 percent. Certain categories of taxpayers are exempt from paying VAT - for example, organizations that have switched to a simplified taxation system.
There are also groups of goods for which the VAT rate has been reduced: for example, some products for children and products. Enterprises producing goods for export do not pay VAT. Other services that are not subject to this monetary burden, the tax office will tell you.
"VAT will be reduced or completely eliminated" - now such headlines are quite common in economic media publications. However, we dareto assume that this will not happen not only in the coming years, but never at all - too large budget revenues are associated with value added tax. Think about this figure - 25 percent of the entire budget of the Russian Federation is formed by paying this particular tax.
So we answered the most common questions about VAT: what is it, who should pay it and how to calculate it. Now you need to familiarize yourself with the tax rates of exactly the products you manufacture or sell, and calculate the VAT specifically in your case. Good luck!
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