1
Q
What is the definition of a VAT ?
A
VAT (sales tax) is a consumption tax added to a product’s selling price. It represents a tax on the ‘value added’ to the product at each stage of a production or supply process.
2
Q
What is the definition of a input tax ?
A
Input tax is the tax paid on the purchase of goods and services.
3
Q
What is the definition of a output tax ?
A
Output tax is the tax charged on the sale of goods and services.
4
Q
What goods and services are exempt from VAT ?
A
- certain land and buildings, where sold, leased or hired
- insurance
- Post Office postal services
- admission charges to museums, art galleries etc.
- betting, gaming and lotteries.
5
Q
What examples are there of zero-rated VAT supplies ?
A
- water and most types of foodstuffs (i.e. not hot food and not food
eaten in a restaurant/café, as service is also provided which is
taxable) - books and newspapers
- drugs and medicines
- children’s clothing and footwear.
6
Q
What items have non deductible VAT
A
- Motor cars
- Business entertaining
