How to subtract vat

how to subtract vat

Things You'll Need

Instructions

Calculate the total amount of VAT charged on sales to customers and other outputs. Other outputs include sales of business assets, sales to employees, commissions received, gifts or samples and other similar outputs. Take note of the sum of these figures.

Sum the amount of VAT due on goods bought from other EU countries. These figures include any services directly related to those purchased goods, such as delivery fees. Be sure to exclude any VAT charges already paid during the purchase. Take note of the sum for later use.

Add the sums of the previous steps together. The resulting sum is the amount of VAT due for payment to the government.

Calculate the VAT already paid for during normal business transactions. This figure

will include VAT for imports from non-EU countries, VAT on goods from bonded warehouses and the sum from step 2. However, VAT from credit notes and unpaid supplier invoices older than six months must be deducted from the total. The resulting figure is the total VAT that can be reclaimed from the government.

Determine whether the VAT is due or if you are eligible to reclaim part of your VAT expenditures. Take the smaller of the sums from step 3 and step 4 and subtract it from the larger sum. If the resulting difference is larger than the sum of step 4, then that is the amount of VAT due to the government. If the difference is smaller, then that is the amount that you can reclaim from the government.

Source: ehow.com

Category: Bank

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