What is the input, passed and accrued VAT?

The tax, is a kind of tax or fiscal obligation generated by a governmental entity with a view to forging benefits from the tax point of view, since the purpose is to collect funds that are destined to the public expenses of the nation.

In theory, the intention of generating taxes is that whoever has the most contribution to the treasury.

This means that taxes are mandatory charges to finance public expenditures of the state and the nation. Taxes finance social expenditures related to infrastructure, health, education and other social expenditures, depending on the policy of each state, country or nation.

What is the Value Added Tax?

Generally and in almost all countries, it is known as

VAT to the Value Added Tax o Value Added Tax, a tax that is generally applied on the sales of the month.

What is input VAT?

When we say that the VAT is supportedIt is because we have a monthly billing on which to base ourselves in order to generate the tax to be paid to the treasury. An example could be VAT in Spain, which generates a tax payable of 21,000 euros for every 100,000 euros and thus in each country according to their tax capitulations, it is calculated in a similar way.

The VAT It is an indirect tax: it is not received by the tax agent directly from the final consumer, at the time of the commercial transaction it is received by the seller.

In the case of intermediary sellers, it is valid or they have the right to refund the tax they have paid to other traders who have preceded in the commercialization chain, this through the amount charged to its clients (fiscal debit), and paying the tax agent the balance correspondent. That is, from the sales book that reflects the invoicing for the sale of goods or services, the transactions reflected are deducted in the supplier purchase book and this balance is the same that is paid to the tax agent or tax collector at the sales.

 What is Accrued VAT?

VAT is defined as a tax burden applied to consumption, that is, financed by the final consumer as passed tax.

How the output VAT is calculated

This operation is not very complex, you just have to multiply the assigned VAT that has a selected item, which generally ranges between 10 and 21%, for the price that has the same product

If you want to calculate a certain product, for example, multiply its value by 0.21. The sum of the price + 21% is the total that must be reflected in the corresponding invoice that will be issued.

There are, in addition to 21%, another type of VAT for certain very specific products.

Clarity should be required when issuing these calculations, when issuing an invoice. When submitting VAT calculations, both output VAT and input VAT must be taken into account.

To charge VAT, the following formal requirements are established:

• It must be done by invoice or similar document. That is, billing for sale and billing for the purchase of goods and services.
• The VAT quota must appear separated from the tax base.
• In some circumstances established by regulation, it may appear

What is Accrued VAT?

It is the one that is charged to customers, that is, it is the percentage added to the sale price of a product or service, for which customers pay.

The amounts of VAT accrued are made up of:

• VAT charged on deliveries of goods and provision of services.
• Self VAT charged on intra-community acquisitions of goods.
• VAT auto impacted on investment events of the taxpayer in the provision of services.
• Equivalence surcharge.
• Auto VAT charged for self-consumption.

Services that generate VAT

At a general level from the global point of view, these are the goods or services that generate Value Added or Added Tax (I.V.A)

• Any sale of retail products and wholesales.
• Ambulance, transport or similar services.
• Consumer home services.
• Transport of people and luggage.
• Hospitality services, household goods, among others.
• Provision of food, prepared meals and beverages to consume on the spot.
• Dance halls, entertainment and discos.
• Telephone services provided through booths or cards.
• Hairdressing services, spas, treatments and beauty institutes.
• Use of sports facilities.
• Photographic studies.
• Vehicle parking.
• Videoclub or video rental.
• Dry cleaning and laundry services.
• Use of highways and toll points.
• All those services authorized by the tax generating entity in each country.