Value Added Tax, or VAT, was first used in France. The famous French economist M. Lloret used this phrase in 1954. Four years later, this type of tax became mandatory for all citizens of this country. In addition, he gradually began to enter the economy of other European countries. In the Russian Federation, VAT appeared during the so-called formation of a market economy in 1992.
What is VAT?
VAT is a part of the money that is added by the seller of goods or services to the cost of creating this product or its purchase (the same applies to the services provided). Employees are not paid the VAT of the amount. In addition, the money that was paid for the goods is not paid here, especially if it was purchased from non-payers of this type of tax. Today, many are interested in how to deduct VAT from the amount.
Why is VAT so widespread?
The popularity of this tax can be explained by the following reasons:
- Thanks to the value added tax, it is possible to determine with perfect accuracy how much a particular product (service) costs at each individual stage of their production. Thanks to VAT, products cannot be taxed twice.
- With the help of this tax it is possible to receive money from imports, but not interfere with exports . This allows you to make healthy competition and properly build the country's domestic market.
VAT in Russia
As already mentioned, value added tax appeared in our country in 1992. Today, its rate is 18%.
Many goods and services are not subject to this type of tax. Therefore, it is simply impossible to deduct VAT from their value. As a rule, these are products that are exported. Products for children are taxed at a lower rate (10%). Also, those companies that operate on a simplified taxation system do not pay VAT. In recent years, the question often arises of reducing the interest rate of this type of tax or completely abolishing it in our country. But so far no single decision has been made on this issue.
We calculate the value added tax
Many, of course, are interested in how to deduct from the amount of VAT. In order to simplify the task for non-specialized workers, special online calculators were invented, with the help of which it is easy to perform this action. But if you know the formula for the calculation, then you can do it yourself. Moreover, the calculation is not very difficult and impossible.
In order to highlight the tax, it is necessary to divide the cost of production into the following expression: 1 + (percentage of VAT): 100. We get this picture. If the interest rate of tax is 10, then it should be divided by 1.1. If it is equal to 18, then to 1.18.
From the result you need to subtract the initial amount of money. You will receive a negative number, but the tax must be positive. Therefore, multiply the sum by -1 (you can simply remove the "-" sign, then nothing else needs to be calculated). If the number turned out "with a penny," then it is worth it to round up.
To calculate the tax, you can either use special online calculators or try to calculate it yourself using simple formulas (the rate of 18% is used):
- Defined amount x 1.18 = amount including tax.
- Defined amount x 0.18 = tax amount.
If you are looking for how to deduct VAT from the amount, then the following formula will come to your aid. You have a certain amount of money (let us define it with the Latin letter N). With a tax interest rate of 18, we get the following picture:
That is, if you have 10,000 rubles, then VAT of this amount will be 1800 rubles (10,000 x 18: 1000). Next, you just need to subtract the resulting number from the original amount.
You see that the question of how to deduct from the amount of VAT is not as difficult as it might seem at first glance. If you know the special formulas, then everything can be calculated quite simply.