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We may not be aware of it, VAT (Value Added Tax) is part of our life, we are paying it regularly. VAT is everywhere, it’s in the most of the goods or services we purchase.
Take for an instance, whenever we go to the salon to get our hair done, when we dine in a restaurant, watch a movie, when we buy clothes, when we gas up our car, and many more, VAT is included in what we pay.
Despite the fact that VAT is everywhere, many of us are not aware of what VAT really is.
In this article, we’ll share with you the basics you need to learn about VAT.
since the tax is levied on commodities or services before they reach the consumer but ultimately paid by the consumer as part of the market price before being paid to the government.
To simplify, it means that a certain tax rate (0% to 12%) is added up to the selling price of a goods or services sold. It is also imposed on imported goods from abroad.
Several changes to the applicable VAT regulations were made in 2021 under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. generally levied on any person who, in the course of trade or business, sells barters, exchanges, leases goods or properties, renders services, and any person who imports goods. The standard VAT rate, which applies to most supplies of goods, properties and services, is 12 percent of the gross selling price or gross value. The purchase of goods, properties or services by the government or govern­ment controlled corporations is generally subject to a 5 percent final withholding tax on VAT. There is also a zero percent (0 percent) VAT rate. What is a VAT return?
A VAT Return is a form you fill in to tell HM Revenue and Customs ( HMRC ) how much VAT you've charged and how much you've paid to other businesses.