Value Added Tax (VAT)
Value Added Tax (VAT) in Trinidad and Tobago is a consumption tax applied to the purchase of goods and services. It's added at different stages of production and distribution, with each business along the way contributing a percentage of the item's price to the government as VAT. VAT serves as a crucial revenue source for the government, supporting public services.
Businesses can often reclaim the VAT they've paid on their expenses, ensuring they're not doubly taxed. While most items are subject to VAT, some exemptions and zero-rated items exist, where either no tax or a 0% tax rate applies, respectively. Ultimately, VAT helps fund government operations while spreading the tax burden across consumers and businesses.
How is VAT calculated
VAT is due on the 25th of every 2 months. You must use your sales, expenses and purchases to calculate the VAT payable.
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How To Find VAT
Step 1.
Calculate the Total Vat on Sales for the two months
4350.00 (2100.00 + 2250.00 )
(Use the Total Vat Column from the Sales table for the 2 months)
Step 2. Calculate the Total Vat on Purchases and Expenses
1290.00 (120+120+375+675)
(Use the total vat column from the Purchases and Expenses tables for the 2 months
Step 3. VAT on Imports = 0.00
(This figure must be deducted from the Total Vat on Sales figure)
Vat payable =
Total VAT on Sales - Total VAT on Purchases and Expenses
3060.00 (4350.00 - 1290.00 )
This is the amount you have to pay the Vat Office
Vat Refundable
This occur when Purchases and Expenses for the given 2 months have exceeded Sales for that same period.
Example of how to calculate the VAT refundable (this is not related to the figures above. It is just an example)
Total Vat on sales = 1290.00
minus
Total VAT on Purchases/Expenses = 4350.00
minus VAT on imports 0.00
(1290-4350-0 = -3060.00
VAT refundable $3060.00 The Vat Office will give you this refund.