Re:EU lost up to €5.4B in tax revenues from Google, Facebook...
by jaclaz on Thursday September 14, 2017 @08:49AM
(#15247392)
>Not quite.
The one that pays the actual tax is the one getting the last (most valued) item, i.e. the final user (consumer).
The way it is collected (incrementally) is not connected to WHO pays WHAT.
If an user pays 122 € (100+22 €) that is the total tax (and is payed integrally by the user).
The government gets in total 22 € (integrally paid by the customer at the end) but it receives that amount in (say) 3 steps by differnt actors:
1 - 10% of 30= 3 The manufacturer buys the raw material, pays the VAT to the supplier that (hypothetically) has no preceding VAT costs and thus must give to the government the whole 3 €
2 - 22% of 80= 17,60-3= 14,60 then he does something with it and resells the product for 80 (i.e. it adds value, reselling it for 80 + VAT to a shop) and has to give to the government the differnece
3- 22% of 100=22-17,60=4,40 the shop sells the item to a consumer and has to give to the government the difference
The government gets 3+14.60+4.40=22 €
The final user has paid 22 €
The incremental collection method allows to have the tax largely paid in advance, but the amount at the end comes out of the final user pocket.
The one that pays the actual tax is the one getting the last (most valued) item, i.e. the final user (consumer).
The way it is collected (incrementally) is not connected to WHO pays WHAT.
If an user pays 122 € (100+22 €) that is the total tax (and is payed integrally by the user).
The government gets in total 22 € (integrally paid by the customer at the end) but it receives that amount in (say) 3 steps by differnt actors:
1 - 10% of 30= 3 The manufacturer buys the raw material, pays the VAT to the supplier that (hypothetically) has no preceding VAT costs and thus must give to the government the whole 3 €
2 - 22% of 80= 17,60-3= 14,60 then he does something with it and resells the product for 80 (i.e. it adds value, reselling it for 80 + VAT to a shop) and has to give to the government the differnece
3- 22% of 100=22-17,60=4,40 the shop sells the item to a consumer and has to give to the government the difference
The government gets 3+14.60+4.40=22 € The final user has paid 22 €
The incremental collection method allows to have the tax largely paid in advance, but the amount at the end comes out of the final user pocket.
The Wikipedia has it very clear:
https://en.wikipedia.org/wiki/Value-added_tax
https://en.wikipedia.org/wiki/Value-added_tax#With_a_value-a...
https://upload.wikimedia.org/wikipedia/commons/2/28/VAT3b22....