Value Added Tax

What is it ?

Value Added Tax (VAT):

• SYSTEMATIC tax (always applied in prices)
• borne by final customer (paid by final customer)
• VAT is "transparent" for companies (Tax collectors)
• Generally, 20% but can be reduced for specific products (food and books = 5.5%)

How do we calculate

Accounts

Expenses

• VAT deductible on purchases.
• CLASS 6
• ACCOUNT NUMBER: 44566
• DEBIT

Purchase of fixed assets

• VAT deductible on fixed assets.
• CLASS 2
• ACCOUNT NUMBER: 44562
• DEBIT

Sales of products

• Collects VAT from customers.
• CLASS 7
• ACCOUNT NUMBER: 44571
• CREDIT