The formula for calculating input VAT is as follows:
Posted: Mon Jan 20, 2025 5:04 am
Jewelry and precious stones;
Gold and platinum objects;
Food and beverages;
Entertainment and recreational services;
Goods and services intended for care of third parties;
Travel, transportation and hospitality (unless they have a direct correlation with income or it can be proven that their sole purpose is to promote the economic activity of the company or professional).
How to calculate input and output VAT?
In the tax management of any business, it is essential to know how to calculate the input and output VAT, since it must be done every quarter in accordance with form 303. Below, we will tell you in a simple way how to calculate these two taxes.
Calculation of input VAT
The first thing a company or self-employed person must do when list of brazil cell phone number calculating the VAT paid is to gather all invoices containing expenses related to the economic activity being carried out.
If the invoices have different VAT percentages, the best option is to organize them according to the value of the VAT applied, in order to make the calculation much more efficient. After grouping the invoices, the VAT amounts of each of the invoices must be added, which will result in the value of the VAT borne.
Total amount of expenses x VAT rate (21%, 10% or 4%)
Again, if you are dealing with invoices with different VAT rates, it is best to do the accounting for each group separately.
For example, if a publishing company purchases work tools worth €1,000 with a VAT rate of 21%, the input VAT would be calculated as follows:
1000 € x 21 % = 210 €
In this way, the VAT incurred is equivalent to €210.
Calculation of VAT charged
Calculating the VAT charged also involves gathering all the invoices, but in this case we are referring to the invoices issued for sales corresponding to the quarter.
It is essential to include all invoices, since omitting any of them can cause problems with the Treasury. Given that there are three types of VAT, you should check which one is applied to sales and, if there is more than one type of VAT, group them according to the percentage.
In the end, the following formula is applied to each group to calculate the VAT charged:
Total sales amount x VAT rate (21%, 10% or 4%)
For example, let's suppose that the same publishing company we referred to earlier manages to sell 1,000 copies during a quarter, for a total value of €15,000. Each of these books has a 4% VAT, so when applying the formula it would be as follows.
€15,000 x 4% = €600
Thus, the VAT charged for that quarter is equivalent to €600.
What happens if the VAT charged exceeds the VAT paid?
When the VAT charged exceeds the VAT paid, this means that the company has charged more VAT than it has paid when purchasing goods and services for its activity. This is usually the most common case and the company must pay the Treasury the difference between both VAT rates, subtracting the VAT charged from the VAT paid.
With the example above, we can see that the company charged €600 of VAT on its sales, while the VAT paid was €210. In this case, the first is subtracted from the second to obtain the VAT payable:
600 € - 210 € = 390 €
Gold and platinum objects;
Food and beverages;
Entertainment and recreational services;
Goods and services intended for care of third parties;
Travel, transportation and hospitality (unless they have a direct correlation with income or it can be proven that their sole purpose is to promote the economic activity of the company or professional).
How to calculate input and output VAT?
In the tax management of any business, it is essential to know how to calculate the input and output VAT, since it must be done every quarter in accordance with form 303. Below, we will tell you in a simple way how to calculate these two taxes.
Calculation of input VAT
The first thing a company or self-employed person must do when list of brazil cell phone number calculating the VAT paid is to gather all invoices containing expenses related to the economic activity being carried out.
If the invoices have different VAT percentages, the best option is to organize them according to the value of the VAT applied, in order to make the calculation much more efficient. After grouping the invoices, the VAT amounts of each of the invoices must be added, which will result in the value of the VAT borne.
Total amount of expenses x VAT rate (21%, 10% or 4%)
Again, if you are dealing with invoices with different VAT rates, it is best to do the accounting for each group separately.
For example, if a publishing company purchases work tools worth €1,000 with a VAT rate of 21%, the input VAT would be calculated as follows:
1000 € x 21 % = 210 €
In this way, the VAT incurred is equivalent to €210.
Calculation of VAT charged
Calculating the VAT charged also involves gathering all the invoices, but in this case we are referring to the invoices issued for sales corresponding to the quarter.
It is essential to include all invoices, since omitting any of them can cause problems with the Treasury. Given that there are three types of VAT, you should check which one is applied to sales and, if there is more than one type of VAT, group them according to the percentage.
In the end, the following formula is applied to each group to calculate the VAT charged:
Total sales amount x VAT rate (21%, 10% or 4%)
For example, let's suppose that the same publishing company we referred to earlier manages to sell 1,000 copies during a quarter, for a total value of €15,000. Each of these books has a 4% VAT, so when applying the formula it would be as follows.
€15,000 x 4% = €600
Thus, the VAT charged for that quarter is equivalent to €600.
What happens if the VAT charged exceeds the VAT paid?
When the VAT charged exceeds the VAT paid, this means that the company has charged more VAT than it has paid when purchasing goods and services for its activity. This is usually the most common case and the company must pay the Treasury the difference between both VAT rates, subtracting the VAT charged from the VAT paid.
With the example above, we can see that the company charged €600 of VAT on its sales, while the VAT paid was €210. In this case, the first is subtracted from the second to obtain the VAT payable:
600 € - 210 € = 390 €