VAT

Value-added tax (VAT) is a consumption tax calculated based on the additional value added to goods or services during each stage of production. It is collected in many countries instead of sales tax.

Example Country X has a 10% VAT. Supplier A charges $10 for raw materials to create Product B. Supplier A must pay VAT of $1 (10% of $10). As a result, Supplier A charges you $11 for the raw materials. You manufacture Product B and sell it to your customer for $20 plus tax of $2. Thus, you pay VAT of $1 to your supplier and your customer pays $2 of VAT to you. You and your supplier each pay the government $1 because you each added $10 of value to the product.

Apprise enables you to track both input VAT that you pay suppliers for goods and services and output VAT that your customers pay you.

You pay the government the difference between the output VAT and input VAT.

In Apprise, input VAT is calculated for accounts payable vouchers and output VAT is calculated for customer invoices. VAT amounts displayed on sales and purchase orders are only estimates of the VAT.

For information on setting up and using VAT in Apprise, see Setting Up VAT and Tracking VAT.