4 ms·

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

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.
  - woodpanel 8y ago
    Sorry, but I think you didn't read my comment. No tax is paid by the customer. He always pays gross. For example: you run a barber shop, mens haircut 10 €, womens 10€. You charge mens from your VAT-exempt company, women from your non-VAT-exempt company. Regardless of what you get in net, the customers hand you 10€ each. However the government takes 2€ from your womens hair cutting business, after you've filed your tax statement. The customer doesn't care whether you have to pay VAT or not. If I may ask: Do you run a business where you have to deal with filing VAT on a regular basis? I'm asking because this misconception that businesses don't have to pay VAT is something that I've held myself, obviously because I didn't knew back then what I was talking about.
    - lultimouomo 8y ago
      > If I may ask: Do you run a business where you have to deal with filing VAT on a regular basis? I'm asking because this misconception that businesses don't have to pay VAT is something that I've held myself, obviously because I didn't knew back then what I was talking about. I very much do, I file quarterly and deal both domestically, intra-EU with reverse charge and extra-EU which is VAT exempt. You're conflating the fact that you're filing VAT reports and forwarding VAT money to the state with the fact that you're paying VAT. These are two different things. Again, do you pay employees? Do you retain some money from their wages and forward that to the state as a down payment on their income taxes[0]? Would you say that personal income tax is a tax on companies? [0] I think this is usual in Europe; it surely is how it works in Italy
      - woodpanel 8y ago
        Okay I see this is getting nowhere ;-) Let me quote another user on this thread: > "it’s absolutely not the same. If the VAT goes up 10%, your benefits after taxes won’t change one bit. VAT is indeed not paid by corporations." but if you insist that somehow the customer is paying VAT to the government, then fine with me. I'm not here to be other people's tax-attorney.

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.
- woodpanel 8y ago
  Sorry, but I think you didn't read my comment. No tax is paid by the customer. He always pays gross. For example: you run a barber shop, mens haircut 10 €, womens 10€. You charge mens from your VAT-exempt company, women from your non-VAT-exempt company. Regardless of what you get in net, the customers hand you 10€ each. However the government takes 2€ from your womens hair cutting business, after you've filed your tax statement. The customer doesn't care whether you have to pay VAT or not. If I may ask: Do you run a business where you have to deal with filing VAT on a regular basis? I'm asking because this misconception that businesses don't have to pay VAT is something that I've held myself, obviously because I didn't knew back then what I was talking about.
  - lultimouomo 8y ago
    > If I may ask: Do you run a business where you have to deal with filing VAT on a regular basis? I'm asking because this misconception that businesses don't have to pay VAT is something that I've held myself, obviously because I didn't knew back then what I was talking about. I very much do, I file quarterly and deal both domestically, intra-EU with reverse charge and extra-EU which is VAT exempt. You're conflating the fact that you're filing VAT reports and forwarding VAT money to the state with the fact that you're paying VAT. These are two different things. Again, do you pay employees? Do you retain some money from their wages and forward that to the state as a down payment on their income taxes[0]? Would you say that personal income tax is a tax on companies? [0] I think this is usual in Europe; it surely is how it works in Italy
    - woodpanel 8y ago
      Okay I see this is getting nowhere ;-) Let me quote another user on this thread: > "it’s absolutely not the same. If the VAT goes up 10%, your benefits after taxes won’t change one bit. VAT is indeed not paid by corporations." but if you insist that somehow the customer is paying VAT to the government, then fine with me. I'm not here to be other people's tax-attorney.