What is VAT? How to deduct from the VAT amount?

Value added tax, or VAT, was first used in France. The famous French economist M. Lore used this phrase back in 1954. In four years, this type of tax became mandatory for all citizens of this country. In addition, he gradually began to enter the economy and other European countries. On the territory of the Russian Federation, VAT appeared in the period of the so-called formation of a market economy in 1992.

What is VAT?

VAT is a part of the money that is added by the seller of goods or services to the cost of creating this product or purchasing it (this also applies to the services provided). In the VAT of the amount does not contribute to the wages of employees. In addition, they do not contribute money that was paid for the goods, especially if it was purchased from non-payers of this type of tax. Today, many are interested in how to deduct from the VAT amount.

Why did the VAT get so widespread?

The popularity of this tax can be explained by the following reasons:

1. Due to the value-added tax, it is possible to determine with an ideal accuracy, how much is a particular product (service) at each separate stage of their production. Thanks to VAT, products can not be taxed twice.
2. With this tax you can receive money from imports, but do not interfere with exports . This allows you to make healthy competition and build the internal market of the country.

VAT in Russia

As already mentioned, value added tax appeared in our country in 1992. To date, his rate is 18%.

Many goods and services are not subject to this type of tax. Therefore, it is simply impossible to deduct VAT from their value. As a rule, these are the products that are exported. Goods for children are subject to a lower rate (10%). Also those companies that work on a simplified taxation system do not pay VAT. In recent years, the question often arises of how to reduce the interest rate of this type of tax, or even abolish it altogether on the territory of our country. But so far there has been no single decision on this issue.

We calculate the value added tax

Many, of course, are interested in how to deduct from the VAT amount. In order to simplify the task for non-specialized employees, special online calculators were invented, with the help of which it is not difficult to perform this action. But if you know the formula for calculation, then you can do it yourself. Moreover, the calculation is not very difficult and impossible.

In order to allocate tax, it is necessary to divide the cost of production into the following expression: 1 + (VAT percentage): 100. We get such a picture. If the tax rate is 10, then you should divide it by 1.1. If it is equal to 18, then to 1.18.

From the received result it is necessary to subtract the initial amount of money. You will get a negative number, but the tax must be positive. Therefore, multiply the amount by -1 (you can just remove the "-" sign, then you do not need to calculate anything). If the number is "with a penny," then it should be rounded up.

To calculate the tax, you can either use special online calculators or try to calculate yourself using simple formulas (18% rate is used):

• A certain amount x 1.18 = the amount including tax.
• A certain amount x 0.18 = the amount of tax.

If you are looking for how to deduct from the VAT amount, then the following formula will help you. You have a certain amount of money (let us define it with the Latin letter N). At an interest rate of tax, which is equal to 18, we get the following picture:

• VAT = N x 18: 100.

That is, if you have 10 000 rubles, then VAT from this amount will be 1800 rubles (10 000 x 18: 1000). Next, you just need to subtract the resulting number from the original amount.

You see that the question of how to deduct from the amount of VAT is not as severe as it might seem at first sight. If you know the special formulas, then everything can be calculated quite simply.