Taxable persons registered for VAT partake in the VAT administrative process from the payment of the input tax to a refund on the output tax. The input VAT is the VAT paid on input materials, goods or services, while output VAT is the tax you collect from your client for the goods, materials or services supplied. If the output tax is higher than the input tax, you have a tax liability. If the input tax is higher than the output tax, you become entitled to a refund (tax credit) of the excess from the authorities. The value added tax must be reported and paid to tax authorities regularly, on a monthly or quarterly basis, depending on the revenue earned. In addition to a tax return, taxable persons must also file the so-called control statements. Finally, it is important to note that the VAT is calculated from the amounts invoiced rather than from amounts actually received. Even if your client does not pay the invoice, you must still pay the corresponding tax.
Process of Taxation
- Value Added Tax
- Income Tax
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