How to calculate the amount of value added tax

The amount of the tax on added cost is calculated depending on a specific product and differs in the relevant interest rate. This kind of tax is indirect because it is charged not with the manufacturer and the consumer of goods or services. In other words, this amount is added to the price at which sold.

Instruction

1. Find out the interest rate of VAT on this type of product. For 2012 there are three tiers of interest rates: 0%, 10% and 18%. 0 percent, i.e., no tax on added value, used in the sale of goods or services destined for export or transit through the territory of the country. Are the products passing through the free customs zone, as well as works and services related to its production, including the carriage of passengers or Luggage.
2. 10% rate for VAT calculation is used in the implementation of social services and categories of goods specified in the list of article 164 of the Tax code. In addition, it is a periodical publication with the exception of the erotic magazines or advertising, educational and scientific books, medicines and other products of medical purpose.
3. 18% rate is applied for taxation of all other goods and services, including: donation/provision, construction and installation work for own consumption, imports of goods into the customs territory of the country, etc.
4. The calculation of the amount of the tax on added cost is one of the four economic problems on percentages: the calculation of VAT, calculation of the amount including VAT amount without VAT and the VAT total. This diversity is explained by the difference of the sides, making the calculation: sellers, buyers, tax authorities.
5. Suppose you chose the rate of 18%. A simple calculation is made according to the formula VAT = S•18% = S•18/100, where S is the taxable amount. To calculate the amount of VAT you first calculate the total amountincluding tax: S1 = S + S•18/100 = S•(1+18/100) = S•1,18.
6. Calculate the amount without VAT, what is the first action to find out the total amount without tax, using the formula of the previous step: S = S1/of 1.18. Select the amount of VAT from the total, which subtract from it the amount without tax, namely VAT = S1 – S = S1 – S1/1,18 = S1•(1 – 1/1,18). Similar calculations are performed for the rate of 10%.