28 ms·

> Result is the same, VAT is not a cost for enteprises. That's just partly true. Depending on the taxing agreements between two countries involved you can appl

> Result is the same, VAT is not a cost for enteprises. That's just partly true. Depending on the taxing agreements between two countries involved you can apply reverse charge, yes. But within one company's country, the VAT is not something that you can "just refund" from the government. Instead you can set off the VAT you've paid against the VAT your customers paid. In other words: The only way for you pay zero VAT is if your earnings (income minus expenditures) are zero too (something that despite the tax-evasion clichés is something that companies usually try to avoid).

unilynx 8y ago
That's not how VAT works. As a simple example for a EU company: - buy something nationally (you pay VAT to the company) - export it to another EU company (reverse charge, so no VAT received or paid) - get the VAT refunded from your local tax agency. Even nationally, you get VAT refunded if you've paid more to others than you've collected. At least for NL, but I'm pretty sure these rules should be the same in all EU countries.
- lultimouomo 8y ago
  This. There are exceptions (e.g. in Italy you only get refunded for 50% of the VAT you pay when buying phones, or 40% the VAT you pay when buying cars), but they are pretty much that, exceptions. If operating domestically you will usually get more VAT money from customers than you will give to suppliers, so you will pay the difference to the state. If for any reason you pay more to suppliers than you get from customers, the difference becomes a tax credit that you can carry to the following accounting period or deduce from some other tax.
  - mamon 8y ago
    >> If for any reason you pay more to suppliers than you get from customers, the difference becomes a tax credit that you can carry to the following accounting period or deduce from some other tax. In Poland it is even possible to get that difference in cash - Tax office wire transfers it to your bank account. This gave birth to a countless scams, where the shell companies forge invoices, ask for VAT tax refund and then disappear with the money.
- woodpanel 8y ago
  How is that any different to what I've said? > Even nationally, you get VAT refunded if you've paid more to others than you've collected. You do realize that this implies you're operating at a loss? Thus my statement about companies usually being run to make profits.
  - lultimouomo 8y ago
    But if you get more VAT from your customers than you give to your suppliers, when you're "paying" the difference to the state you're just forwarding part of the VAT which your customers paid, you're not paying it yourself.
    - woodpanel 8y ago
      You see the error here? You write an amount in an invoice, the customer pays you. From that, the taxman demands his percentage later on from you. The only way to reduce the amount you have to pay is by buying stuff. Nowhere in the process is the customer paying two parties. It's just lexical. Would you say 'oh the company is just routing its income tax to the taxman' if companies had to put their income tax percantages on invoices too? The client however pays you 10 bucks in gross regardless whether the VAT you have to pay afterwards is 7, 15 or 25%
      - lultimouomo 8y ago
        Would you say employers pay income taxes for employees if they retain part of their wage and forward it to the state as a down payment for the employee income tax? I wouldn't say so; income tax is paid by the employee, even if the employer is forwarding the money to the state. It doesn't matter who puts the money in an envelope and goes to the tax office; it matters who is subject to the tax. Non-EU turists traveling in Europe will pay VAT on souvenirs that they're bringing back to their countries, and upon exiting from EU they will actually will get the VAT back, since they paid for it, but they were not supposed to since the goods are in the end going to be used outside EU. This would just not make sense if VAT was paid by the seller.

unilynx 8y ago

That's not how VAT works. As a simple example for a EU company: - buy something nationally (you pay VAT to the company) - export it to another EU company (reverse charge, so no VAT received or paid) - get the VAT refunded from your local tax agency. Even nationally, you get VAT refunded if you've paid more to others than you've collected. At least for NL, but I'm pretty sure these rules should be the same in all EU countries.

lultimouomo 8y ago
This. There are exceptions (e.g. in Italy you only get refunded for 50% of the VAT you pay when buying phones, or 40% the VAT you pay when buying cars), but they are pretty much that, exceptions. If operating domestically you will usually get more VAT money from customers than you will give to suppliers, so you will pay the difference to the state. If for any reason you pay more to suppliers than you get from customers, the difference becomes a tax credit that you can carry to the following accounting period or deduce from some other tax.
- mamon 8y ago
  >> If for any reason you pay more to suppliers than you get from customers, the difference becomes a tax credit that you can carry to the following accounting period or deduce from some other tax. In Poland it is even possible to get that difference in cash - Tax office wire transfers it to your bank account. This gave birth to a countless scams, where the shell companies forge invoices, ask for VAT tax refund and then disappear with the money.
woodpanel 8y ago
How is that any different to what I've said? > Even nationally, you get VAT refunded if you've paid more to others than you've collected. You do realize that this implies you're operating at a loss? Thus my statement about companies usually being run to make profits.
- lultimouomo 8y ago
  But if you get more VAT from your customers than you give to your suppliers, when you're "paying" the difference to the state you're just forwarding part of the VAT which your customers paid, you're not paying it yourself.
  - woodpanel 8y ago
    You see the error here? You write an amount in an invoice, the customer pays you. From that, the taxman demands his percentage later on from you. The only way to reduce the amount you have to pay is by buying stuff. Nowhere in the process is the customer paying two parties. It's just lexical. Would you say 'oh the company is just routing its income tax to the taxman' if companies had to put their income tax percantages on invoices too? The client however pays you 10 bucks in gross regardless whether the VAT you have to pay afterwards is 7, 15 or 25%
    - lultimouomo 8y ago
      Would you say employers pay income taxes for employees if they retain part of their wage and forward it to the state as a down payment for the employee income tax? I wouldn't say so; income tax is paid by the employee, even if the employer is forwarding the money to the state. It doesn't matter who puts the money in an envelope and goes to the tax office; it matters who is subject to the tax. Non-EU turists traveling in Europe will pay VAT on souvenirs that they're bringing back to their countries, and upon exiting from EU they will actually will get the VAT back, since they paid for it, but they were not supposed to since the goods are in the end going to be used outside EU. This would just not make sense if VAT was paid by the seller.