What is VAT? - Introduction - MFFA Belastingadvies | Tax Advice
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Introduction for those who want to know what VAT is? Please do not hesitate to contact us if you have any questions.
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What is VAT? - Introduction - MFFA Belastingadvies | Tax Advice
- 1. MFFA Belastingadvies | Tax Advice Specialized in Expats and International Companies Amsterdam | Zwolle | Assen The Netherlands
- 2. VAT In Europe how does is work?
- 3. Introduction of VAT • What is this? • Do you have to charge this? • Can I get it back? Invoice Price excl. VAT VAT 20% Price incl. VAT € 100,- € .20,€ 120,-
- 4. Entrepreneur A supplies goods and/or services Entrepreneur • Entrepreneur A is obliged to charge VAT on goods/services supplied (EU VAT Rules prescribe this ability). • The recipient can deduct the VAT if he is an entrepreneur. ??? A B Supply of goods and/or services
- 5. ??? B receives an invoice • Entrepreneur A charges € 120,(invoice incl. VAT) to B. • Entrepreneur A pays € 20,- VAT to local Tax Authority ??? Tax Authority B € 20,Invoice Price excl. VAT VAT 20% A € 120,100,- € 20,€ 120,- € .20,- Price incl. VAT Entrepreneur € 100,€ 120,-
- 6. Can ??? B reclaim the paid VAT If ??? B is an entrepreneur, a private individual (“PI”), he can reclaim the paid € he cannot 20,- VAT. reclaim the paid € 20,- VAT. Entrepreneur .0.. ??? PI B Tax Authority Invoice Price excl. VAT € 100,- VAT 20% € .20,- Price incl. VAT € 120,- € 20,-
- 7. Basic principle VAT Rate 20% 8,00 € 120 Consumer Consumer € 4,00 €100 € 8,00 Tax Authority Total added value VAT 20% Retailer Retailer € 100,€ 20,- € 60 This € 20,- tax is a burden for the consumer. It has been paid indirectly to the tax authority through tax returns and reclaims by the supplier, manufacturer and retailer. Manufacturer Manufacturer € 40 Supplier Supplier €0 Sales Cost of Goods Added Value Taxes to be paid Sales Cost of Goods Added Value Taxes to be paid Sales Cost of Goods Added Value Taxes to be paid € 40,€ 0,€ 40,€ 8,00 € 60,€ 40,€ 20,€ 4,00 € 100,€ 60,€ 40,€ 8,00
- 8. When does VAT apply Situation 1 United States Europe Import Import VAT is due by importer of record
- 9. When does VAT apply Situation 2 Europe The Netherlands Germany Intracommunity supply VAT 0% applies under conditions
- 10. When does VAT apply? Situation 3 The Netherlands B A Local Supply VAT 19%
- 11. When does VAT apply? Situation 4 United States 0% Export VAT-rate applies under conditions Europe Export
- 12. When does VAT apply? Situation 5 Europe The Netherlands VAT-charge is reversed to recipient, local VAT in country of recipient is due but can be deducted as input again. Germany Intra community acquisition
- 13. Pitfalls • Formal rules for intracommunity supplies and acquisitions are not met • Distance sales • Incorrect invoices (incorrect reflection of supply at hand) • Incorrect filing of returns leads to problems • Incorrect (local) VAT rates reported
- 14. Contact For further information please do not hesitate to contact us: E-mail: info@mffa.nl Website: www.mffa.nl