The calculation of VAT does not involve a flat rate for all kinds of products in Vietnam or any other country. The VAT percentage depends on several parameters including the country you live in and the products you are selling.
In a lot of countries, the VAT rate varies with the business type. For instance, in the United Kingdom, a business owner who is running a journalism business would not be paying the same VAT as someone owning a cloth brand. Thus, business owner should make sure that the correct percentage of VAT is applied.
Determination of VAT on Imported Goods
These days, economies of all countries are expanding at a rapid rate. Companies expand their business domains by selling locally manufactured as well as imported products. However, in case of imported products, certain exclusive factors are involved in the calculation of VAT.
Import Duty
Business owners have to pay import duty on products that they import. The payable price depends on various factors including the product category, country of important and price. The VAT applied on the product can only be calculated if the important duty has been determined. Various custom regulations are applied including the weight of the product. Once the important duty has been calculated, the further steps of VAT calculations can be performed.
Calculation of VAT (example)
Consider that an imported product has a commercial invoice price of £ 200. The price would be increased after the import duty has been added to it.
Total Product Price = Commercial Invoice Price + 10% (Commercial Invoice Price) + 20% of Product Price (ImportDuty)
The VAT would be applied on the total product price. This price would obviously depend on the commercial invoice price of the product, important duty and other factors. Business owners should be well aware of these factors so that they know about the correct evaluation of VAT values.
Core Factors that affect VAT of imported goods
The calculation of VAT for local goods is not the same as VAT for imported goods. When you talk about calculating VAT of imported goods, various intermediate factors have an impact. Given below are some core factors you have to pay attention to.
1. Import Duty Applied
If you have a look at the formula mentioned above, you would see that import duty is a factor used for this calculation. The VAT value depends on the total product price and this price depends on the import duty. Thus, the VAT value is calculated on the basis of various factors including the import duty.
2. Commercial price on invoice
When a product is imported, it comes with an invoice on which the product price is mentioned. The VAT value has a direct proportionality relationship with the commercial price of the product. Products that have high commercial invoice price have a higher value for VAT. Similarly, low priced products have a low VAT value. As someone who has to pay VAT, it is important to know about each factor that has an impact on the VAT price.
3. Nature of product
In most countries, VAT is not applied at a flat rate and depends on the product type. Some product types have a higher import duty so the VAT price increases automatically. Business owners should know about the import duty applied on the product that they are dealing in. Each product type has a different rate of import duty which has an impact on the evaluation of VAT. Before you start paying VAT, you should know about the import duty applied according to the product type. Other than that, it is important to have a proper idea of the VAT formula. It obviously helps in checking whether you are paying the correct amount or not.
VAT calculations using a dependable online calculator
It is an obvious fact that software tools have strong impacts on our lives in various ways. How does it feel when you have to add the prices of 20 products without using a calculator? Even if you are good at mathematics, the feeling would not be that good. People prefer using a calculator so that they do not have to spend so much time and put in so much effort.
The Calculators.tech VAT calculator is a reliable tool which helps users in calculating this form of tax. The link to this calculator is given below.
https://www.calculators.tech/vat-calculator
Values that have to be entered as Input
The overall user interface of this tool is very simple. When you open the link, you would be required to enter the product price and tax percentage as the input values. There is no lengthy procedure of going through several web pages without the need being there.
Output Values produced
Based on the input values being entered by the user, two output values would be generated. When you enter the product price and tax percentage, the gross price and tax amount would be shown on your screen.
Conclusion
The use of online calculators is important when you are required to perform complex calculations. The calculation of VAT is not simple by any means so the first thing you need to do is get your hands on a quality VAT calculator. This calculation is all about efficiency and accuracy. If the correct input values have not been entered, the generated output values would be incorrect as well.
The VAT calculator by calculators.tech is an impressive tool. It offers several benefits to users which other tools do not put on offer. First of all, the tool is online and completely free of cost. You can use the tool for as long as you want without paying any charges. Along with that, as the tool is online, no downloads or installations are needed for this purpose. Simply click the link and you can use the calculator.
Accuracy is another benefit offered by this tool. There are no chances of ending up with incorrect results. The tool is 100% dependable and no errors are made in the process.