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Why would I think twice about it? It's a no brainer given last few years. I just hope they also include artillery shells and cannons too. VAT is a tax levied o

Why would I think twice about it? It's a no brainer given last few years. I just hope they also include artillery shells and cannons too. VAT is a tax levied on consumers, not companies/industries. Companies get it from consumers and forward it to the government, that's an optimization of enforcement, it doesn't mean companies pay it out of their pockets. Government pays companies back whatever VAT they paid on stuff they bought. It would make no sense for the government to pay VAT to itself when buying such expensive stuff; this is again a process optimization, not some fundamental change of how the tax works. Why would you need lobbyists when you have Putin just behind the door?

oriettaxx 2y ago
> It would make no sense for the government to pay VAT to itself I've got it, but you agree with me that is weird that when the State buys from the private market they do have to pay VAT (even to themselves) while when that market is "defense" it may not happen? Then, of course, If I produce pistol (as a company), and buy metal, and make a pistol, don't I end up paying VAT on the "added value" ? in other way, even if a company sell to other companies, the VAT% (10% or 90%) does or does not affect profitability? Then of course you sure have some percentage of buyers who cannot claim VAT (is it small, only consumers? what about not perfectly legal business.... )
- throwaway48540 2y ago
  When the state buys stuff, the paid VAT always goes right back to it. In some/many cases it's easier to eat this inefficiency, but in some cases it's easier to not do the useless transfer - especially when we're talking about tens of millions of euro and products that only the government can buy. I don't see anything weird about selecting few specific industries where the transactions are always with the government and in high amounts to optimize this useless transfer and bureaucratic busy work away. Nobody paid less taxes than they should have, nothing has changed about that. > Then, of course, If I produce pistol (as a company), and buy metal, and make a pistol, don't I end up paying VAT on the "added value" ? in other way, even if a company sell to other companies, the VAT% (10% or 90%) does or does not affect profitability? No, profitability is not affected in any way. The consumer always pays, not any company in the chain of raw material to consumer product. VAT is irrelevant to them, it's just some bureaucracy that needs to be taken care of, but nothing else. It could be 110% and they wouldn't care - VAT is separately on top of the invoiced price and you never treat it as your money, you're just holding it for the government for up to 30 days. > Then of course you sure have some percentage of buyers who cannot claim VAT (is it small, only consumers? what about not perfectly legal business.... ) Any business can claim VAT back if they choose to. Some countries allow small businesses to say "I don't care, don't bother me, I will eat the difference". This results in losses to the small business, it's done because the paperwork is really hard to do - takes a lot of time and money (you need an expensive tax advisor in many everyday cases). The usual limit of this is around 50k USD of yearly revenue. Above that, it's necessary to fill the VAT forms.
  - oriettaxx 2y ago
    ah, I understand. Well, anyhow, let me say that, since it makes no difference for them (apart from the burden of VAT accounting), I would let them pay VAT as every other sector and that's it :) One last doubt: * when in the national accounting a State report to have spent 1M for goods for education, in that million they do include VAT (I've just found out, I did not know it before), so the VAT% of that spending was money that "went back" to the State (to us). * when in the same accounting they report to have spent 1M in guns (a vat exempt sector), that VAT% benefit for us is gone: am I right?
    - throwaway48540 2y ago
      Consider that it's not just a burden to the company, but also to the tax agency. Imagine being the guy who has to go through the papers (could easily be hundreds or thousands of sheets - my own small company submits around 10-20 sheets per month) and then make a transfer of hundreds of millions of EUR every month. Imagine you make a mistake there... That company definitely has lawyers ready to pick on every little thing you do wrong. Accounts of businesses and governments are without VAT except for the most generalized cash flow tables. My own government reports both numbers (with and without VAT) in cases where this matters. I'm quite surprised yours doesn't do this. But yes, you're right - in your situation the actually spent amount would be different by the VAT rate.
      - oriettaxx 2y ago
        > My own government reports both numbers (with and without VAT) ah, interesting. no VAT in the UK https://www.gov.uk/government/publications/how-public-spending-was-calculated-in-your-tax-summary/how-public-spending-was-calculated-in-your-tax-summary https://www.gov.uk/government/publications/how-public-spendi... (well, it's the first link I found... even in the excel file no vat mention..... I am sure I can find mention to it, I did not search much No vat for Italy, too (just a quick search), even for the defence https://temi.camera.it/leg19DIL/temi/19_il-bilancio-della-difesa-in-breve https://temi.camera.it/leg19DIL/temi/19_il-bilancio-della-di...
      - 2y ago
oriettaxx 2y ago
> Why would you need lobbyists when you have Putin just behind the door? yes, you are right add also many others who accuse you to be Putin's friend if you care about peace

oriettaxx 2y ago

> It would make no sense for the government to pay VAT to itself I've got it, but you agree with me that is weird that when the State buys from the private market they do have to pay VAT (even to themselves) while when that market is "defense" it may not happen? Then, of course, If I produce pistol (as a company), and buy metal, and make a pistol, don't I end up paying VAT on the "added value" ? in other way, even if a company sell to other companies, the VAT% (10% or 90%) does or does not affect profitability? Then of course you sure have some percentage of buyers who cannot claim VAT (is it small, only consumers? what about not perfectly legal business.... )

throwaway48540 2y ago
When the state buys stuff, the paid VAT always goes right back to it. In some/many cases it's easier to eat this inefficiency, but in some cases it's easier to not do the useless transfer - especially when we're talking about tens of millions of euro and products that only the government can buy. I don't see anything weird about selecting few specific industries where the transactions are always with the government and in high amounts to optimize this useless transfer and bureaucratic busy work away. Nobody paid less taxes than they should have, nothing has changed about that. > Then, of course, If I produce pistol (as a company), and buy metal, and make a pistol, don't I end up paying VAT on the "added value" ? in other way, even if a company sell to other companies, the VAT% (10% or 90%) does or does not affect profitability? No, profitability is not affected in any way. The consumer always pays, not any company in the chain of raw material to consumer product. VAT is irrelevant to them, it's just some bureaucracy that needs to be taken care of, but nothing else. It could be 110% and they wouldn't care - VAT is separately on top of the invoiced price and you never treat it as your money, you're just holding it for the government for up to 30 days. > Then of course you sure have some percentage of buyers who cannot claim VAT (is it small, only consumers? what about not perfectly legal business.... ) Any business can claim VAT back if they choose to. Some countries allow small businesses to say "I don't care, don't bother me, I will eat the difference". This results in losses to the small business, it's done because the paperwork is really hard to do - takes a lot of time and money (you need an expensive tax advisor in many everyday cases). The usual limit of this is around 50k USD of yearly revenue. Above that, it's necessary to fill the VAT forms.
- oriettaxx 2y ago
  ah, I understand. Well, anyhow, let me say that, since it makes no difference for them (apart from the burden of VAT accounting), I would let them pay VAT as every other sector and that's it :) One last doubt: * when in the national accounting a State report to have spent 1M for goods for education, in that million they do include VAT (I've just found out, I did not know it before), so the VAT% of that spending was money that "went back" to the State (to us). * when in the same accounting they report to have spent 1M in guns (a vat exempt sector), that VAT% benefit for us is gone: am I right?
  - throwaway48540 2y ago
    Consider that it's not just a burden to the company, but also to the tax agency. Imagine being the guy who has to go through the papers (could easily be hundreds or thousands of sheets - my own small company submits around 10-20 sheets per month) and then make a transfer of hundreds of millions of EUR every month. Imagine you make a mistake there... That company definitely has lawyers ready to pick on every little thing you do wrong. Accounts of businesses and governments are without VAT except for the most generalized cash flow tables. My own government reports both numbers (with and without VAT) in cases where this matters. I'm quite surprised yours doesn't do this. But yes, you're right - in your situation the actually spent amount would be different by the VAT rate.
    - oriettaxx 2y ago
      > My own government reports both numbers (with and without VAT) ah, interesting. no VAT in the UK https://www.gov.uk/government/publications/how-public-spending-was-calculated-in-your-tax-summary/how-public-spending-was-calculated-in-your-tax-summary https://www.gov.uk/government/publications/how-public-spendi... (well, it's the first link I found... even in the excel file no vat mention..... I am sure I can find mention to it, I did not search much No vat for Italy, too (just a quick search), even for the defence https://temi.camera.it/leg19DIL/temi/19_il-bilancio-della-difesa-in-breve https://temi.camera.it/leg19DIL/temi/19_il-bilancio-della-di...
    - 2y ago

oriettaxx 2y ago

> Why would you need lobbyists when you have Putin just behind the door? yes, you are right add also many others who accuse you to be Putin's friend if you care about peace