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VAT - VALUE ADDED TAX
The tax charged on the sale of most goods and services.
What is it?
When the business makes a sale of its goods, VAT is added to the selling price... This is known as VAT INPUT
When the business bought goods, VAT will also added in the purchase price... This is known as VAT OUTPUT
-- 3 difference rates of VAT --
1. Standard rate
Most goods and services are standard rate.
2. Reduced rate
It is applied to goods,services when government tries to encourage people to buy them.(Children's care seats, Energy saving light bulbs)
3. Zero rate
the goods are still VAT-taxable, but the rate of VAT you must charge your customers is 0%.(Books,Rice,Water,Newspaper)
To calculate VAT :
For example : vat is charged at 10%
Total = $11000
VAT = $1000
Net = $10000
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