4 ms·
You can subtract the cost of goods but you can’t subtract operating expenses like R&D.
by thethimble 5y ago
You can subtract the cost of goods but you can’t subtract operating expenses like R&D.
- Hamuko 5y agoI think you can subtract R&D costs somewhere else. At least I remember the accounting department being really picky about having accurate details on R&D hours.
- geysersam 5y agoDon't know about US VAT system, but for VAT in Europe expenses such as salaries etc are deductable.
- skybrian 5y agoI hadn’t heard of this. Where can I read more about it?
- edanm 5y agoNot out of VAT though. They are deductible from your income, which is how you come up with how much profit you made (which is taxed). With VAT, you can deduct from it all the other VAT that you paid. E.g. you bill someone 100 + 10% VAT for a total bill of 110. You receive 110. You are now supposed to pay that 10 VAT to the government. But before you pay it, you can subtract the VAT that you paid in the last month, so if you bought, say, scissors, that had a VAT of 2, and a pencil, with a VAT of 1, you have to pay a total VAT of 7 back to the government.