For production enterprises, such as factories and self-operated export companies, in the process of producing and selling products, each link is accompanied by the value-added of the product. The part of the taxes and fees paid by the enterprise to the state is VAT. So how is VAT calculated and paid?
Let ’s first understand the value added tax (VAT), which is actually a form of consumption tax. The purpose of VAT is set by the government to achieve fiscal revenue. This part of fiscal revenue is mainly invested in public utilities and public welfare infrastructure construction, such as hospitals and parks.
From the buyer's point of view, we obtain a VAT ticket from the factory, which includes the unit price, amount and 17% tax, which is the additional tax on the price. From the seller's point of view, it is a tax generated by the value-added portion. Next, let's look at the characteristics of VAT.
1. The value-added tax is levied on the value-added part of the product circulation process. Every value-added in the circulation link is paid once. If there is no value-added, VAT is not required.
2. Value-added tax is an out-of-price tax. The taxpayer does not bear the tax, and the final consumer is the bearer of all taxes in all production links and circulation links.
Let's take a simple commodity circulation process from the raw material supplier—the production company—the trading company—the final consumer to see how the VAT is calculated and paid for each participating role in each link.
Raw material supplier
For the raw material suppliers, in the actual supply of raw materials, there may actually be upstream raw material suppliers who obtain some low-level raw materials and supply them to the production enterprises after processing. Here we assume that there is no upstream raw material supplier. The price of a raw material provided by the raw material supplier is 100 yuan without tax, and the value-added part is 100 yuan. Since the generally applicable VAT rate is 17%, the calculation formula is 100 * 17% = 17 yuan. During this process, the raw material supplier eventually sold the raw materials at a price of 100 yuan plus a value-added tax of 17 yuan, or 117 yuan. At this time, the raw material supplier needs to pay the government the output tax due to sales, that is, a 17 yuan VAT fee.
For production enterprises, the purchase price of raw materials from raw material suppliers is 117 yuan including tax. After a series of production, it becomes a finished product. In addition to the operating profit, if the value-added part of the product is 50 yuan, the calculation formula is: 150 * 17% = 25.5 yuan. In this process, the manufacturing enterprise finally sold the product to the trading company at a tax-included selling price of 150 + 150 * 17% = 175.5 yuan. At this time, what are the taxes and fees that the manufacturing enterprises have to pay to the government? There are two parts here, one is the value-added part of the purchase of raw materials，17 yuan, the other is the value-added part of the sale of finished products，25.5 yuan. At this time, because the raw material supplier has paid 17 yuan of output VAT to the government, when the manufacturing enterprise purchases the raw material, it purchases it at a tax-included price, and has already undertaken the VAT fee contained in it. The tax paid by the enterprise to the government is a value-added tax of 25.5-17 = 8.5 yuan.
For trading companies, at the tax-bought purchase price of 175.5 yuan, after purchasing this product, the profit pricing of the product also needs to be considered. If the value-added part of the product is 60 yuan, the calculation formula is: 210 * 17% = 35.7 yuan. In this process, the commerce company finally sold the product to the final consumer at a tax-included selling price of 210 + 210 * 17% = 235.7 yuan. Similarly, at this time, the input VAT of the trading company is 25.5 yuan, and the output VAT is 35.7 yuan. At this time, because the input VAT was already paid by other participants: raw material suppliers and production enterprises in the previous link, the final tax paid by the trading company to the government is 35.7-25.5 = 10.2 yuan VAT.
The final consumer
In the end, consumers bought this product at a price of 235.7 yuan, and the total value-added tax included is 210 * 17% = 35.7 yuan. In other words, consumers as the final users and owners of the product, although the value-added tax generated in the previous links is paid by the participating roles, they are not borne by them. It is entirely up to the final consumer to pay for it.