VAT Flashcards
what does VAT tax
goods and services where there is a consideration
what conditions must apply for vat to be charged
- supply of goods and services
- effected in a state (place of supply is ireland)
- for consideration
- made by a taxable person
- acting in that capacity
what does it mean that vat is charged at each stage of the supply chain
each supplier along the chain deducts vat charged to them and must charge VAT on their sales
ultimately the consumer must pay as they cannot deduct vat charged to them
what does self supply mean
change of goods for vat purposes
examples of self supply
move of computer from vat eligible to vat exempt part of the business
appropriation of business stock for private use
what is the general rule for place of supply
where the goods are situated when the supply takes place
if goods are being exported or imported where is the place of supply
where transportation begins
if goods require assembly/instillation where is the place of supply
where assembly/instillation occurs
if supply is b2b where is the place of supply
where the customer business has its establishment
if supply is b2c where is the place of supply
where the supplier has its establishment
what is the standard vat rate
23%
what is the rate used for labour intensive items eg building services
or magazines, cinema, hairdresser, hotel
13.5%
what is the rate used for newspapers, books
9%
what is the rate used for sales of cattle and various other livestock and related supplies (farmers vat)
4.8%
example of some 0 rated goods/services
medicines, childrens clothing
goods exported outside EU, goods dispatched to VAT registered customers in EU
Good purchased by travellers for destinations outside the EU
examples of vat exempt goods and services
banking and financial, medical and dental, education, letting of property
what does VAT exempt mean
cannot register for vat so cannot claim back on inputs or charge on outputs
what is the difference between exempt and zero rated
zero rated can claim back on inputs
what is the composite supply rule
a good/service contains two or more goods/service together
charge rate of the main item
example of composite supply
coal and the bag it comes in
charge rate on coal
what is multiple supply
goods/service sold as a unit but could easily be sold separately
apply individual rates to each component
example of multiple supply
school book and copy book
what is the two third rules
where a service requires a supply of goods
if service makes up 2/3 of the invoice use service rate (13.5%)
else use standard rate
what is a taxable person
a person who independently carries out any business supplying goods or services which are liable to VAT or VAT exempt
