Operation of VAT and taxes

[Christophe]

How does VAT work, is it a tax?

Topic divided since: https://www.econologie.com/forums/limites-et ... 10061.html

It'll do as VAT has 5.5%, roughly a shot into the water because no one applies.

Uh! Everyone applies it. But few pass the price down (TTC)! Nuance!

There you talk about the recent decline in the restoration because the decline in the building (which dates from several years), the customer has necessarily felt more I think. Personally, I was too young to make quotes at the time of its application ...

We do not look at a quote to 2000 € in the same way as a restaurant note to 50 € ... so necessarily ...

[sherkanner]

Yes I'm talking about the recent decline in restaurants, the idea of ​​only applying a few products at the discretion of the restaurant owner is simply absurd.
Either it drops all of a sudden (gold alcohol) or it does not drop anything.
He will donate 5% VAT on the dish sold, we continue to pay 19%, 14% margin (or there is a detail that escapes me)

[oliburn]

all in Bolivia guys, retirement goes from 65 to 58 years ...

[Christophe]

He will donate 5% VAT on the dish sold, we continue to pay 19%, 14% margin (or there is a detail that escapes me)

Here are some details about VAT, because there are many mischiefs and misconceptions (as pro do not pay VAT) in the minds of people about it it seems to me:

a) The VAT is applied on the HT that is to say that in a product to 100 € TTC there is no 19.6 € VAT but 16.39 € ... contrary to what many people think but they are wrong
b) The trader does not earn anything on the VAT: he only collects it for the State
c) VAT is a systematic and mandatory tax on any commercial MARGINexcept special schemes like the micro company that is not subject to VAT on sale but can not recover it either, so she bought VAT.
d) All B2B transactions (pro to pro) are VAT invoiced and paid (except intra-community invoice or VAT is not payable). The pros therefore pay the VAT well.
e) It is only during the VAT declaration that the pro can deduct the VAT from the invoices he has paid and therefore in some special cases (rare), he can retouch (large investment for example over a quarter). ..but in normal times, the VAT is still due because if the company does not pay it is that it does not release a margin and therefore it does not return money.

Practical example:

Let's take the case of a restaurant owner who goes from 19.6 to 5.5% without changing his prices: menu at 100 €.

19.6%: VAT collected, 16.39 €
5.5%: VAT collected 5.21 €

Suppose that the cost price in invoice HT of the ingredients of the menu is 20 €. The restaurant owner therefore recovers VAT on these purchases.
19.6%: VAT to recover: 3.28 €
5.5%: VAT recover: 1.04 €

VAT due to the State (difference of 2):
19.6%: 13.11 €
5.5%: 4.17 €

Commercial margin:
19.6%: 100 - 20 - VAT = 80 - 13.11 = 66,89 € and we find 13,11 € = 19,6% of 66,89 €
5.5%: 80 - 4.17 = 75,83 € and we find 4,17 € = 5.5% of 75,83 €

Gain on the margin of the changeover to 5.5% without change of prices: 75,83 - 66,89 = 8.94 € = also the difference in VAT due = 13,11 - 4,17 is about 9% of the customer price. The margin seems important to you? Yes, because I took a low cost of the goods But there is talk of margin, the profit will necessarily be lower: deduct the expenses such as the salary of employees, depreciation, real estate, expired ingredients, charges, social, taxes various and taxes ... and here we get an idea of ​​the net profit ... not much for 100 € turnover, for the traditional restoration ca must be between 10 and 20 € net.

By the way, if restaurant owners' pre-tax profits increase with the fall in VAT, so do their taxes, so the State will alter part of this "tax gift". It is therefore not entirely fair to speak of VAT difference without taking this correction into account.

[chatelot16]

VAT is a tax because it not only has no progressivity (unlike income tax) but especially it costs too much paperwork, it incites fraud!

the only possible escalation of this tax and that it is different according to the products

for me the best VAT rate for food products, including catering is 0%

[bamboo]

VAT is a tax because it not only has no progressivity (unlike income tax) but especially it costs too much paperwork, it incites fraud!

the only possible escalation of this tax and that it is different according to the products

for me the best VAT rate for food products, including catering is 0%

Another point of view: VAT is the most intelligent tax because it applies to all products, whether they are made in France or in China.
All other taxes are only used to relocate factories.

[Christophe]

It is a tax for the consumer but indeed we can consider it as a "before tax" for the merchant since it is his margin therefore which includes his profit which is taxed ...

VAT and taxes go anyway in the same boxes ...

I do not see how the VAT would encourage fraud more than another form of taxation, on the contrary in some cases as I said more just before, you can have a VAT credit ...

Yes it's complicated, but the tax is complicated and VAT is certainly less complicated than other taxes in relation to its effectiveness. The VAT is the 1er income item of all states (except maybe exception as poor countries of Africa or communist dictatorship like North Korea) and very far!

Imagine the time of the gabelle while 99% of the population could not read ... it was complicated ...

[Did67]

but above all it costs too much paperwork,

it incites fraud!

1) Excessive paperwork: not for the state! It's the companies that collect ...

2) which tax does not incite fraud ?????

3) the fair tax, accepted by all, paid with a good heart, we are still looking for it.

For having lived in states without state (so with very little taxes!), I can guarantee you that it is the poorest who toast! I am talking about some African states in which I lived.

I saw with my own eyes very poor people, miserable, having to pay for their care in the hospital and getting into debt for life, paying before receiving a fee ... and very rich in 4 x 4 TV, swimming pool, everything you can imagine, going to be treated in France in a private clinic ... The tax in a stateless state, it is called the "backschich" and it is at random, depending on the mood of the official which is paid directly (and abuses since when the limit is crossed, there are no more limits) ...

I am not one of those who moan against taxes (even if I have trouble paying mine). Even if our sytem goes to the bottom by niches, shield, abatement and organized fraud (tax lawyers that some can afford!) ...

[Christophe]

3) the fair tax, accepted by all, paid with a good heart, we are still looking for it.

ISF paid by all ... the rich

[chatelot16]

not so sure !

when you buy a big Chinese thing the VAT is paid in one go! and does not waste a lot of time

if we do a job in France, with many suppliers, and many companies each intermediary must do the paperwork for this VAT is the cost is not negligible: even if the VAT collected for the state is the same proportion of the total price it produces paperwork costs that I find harmful!


I will find it easier to add 16.39% tax to all income than to charge 19.6% VAT to all expenses