VAT Question

MMDeire

I have a VAT question about importing and subsequently selling the imports.

Lets say for example I order 100 Marbles from China at a cost of €15.00 each.

A total of 1,500 for arguments' sake (total goods value).

*1. What VAT, if any, will be charged for the import?
2. If I then sell the marbles for, let's say, €20 each do I then add 21% more VAT to this? (Selling for €24.20)

*Assuming I had to pay 21% on the import (+3.15) for each marble [15+3.15] = €18.15 cost to me), would the government make €7.35 on each marble (3.15+4.20) and I make only €1.85 (20-18.15)?

Maybe I'm all wrong (and I hope so). Does anyone know?
If these calculations are correct, would I get VAT back from the government for multiple taxings on a single product?

seamus

Yes, as far as I know you have it correct, you've just confused your figures a bit and double-paid the VAT.

The total VAT is only payable by the end-consumer.

So you import for €15.00 and are charged €3.15 VAT on this.

If you sell for €20 (ex-VAT), the VAT payable by the end-consumer is €4.20, which is includes the €3.15 that you paid at import.

In your VAT return then you can claim back the €3.15 VAT you paid at customs.

Afaik.

MMDeire

OK Seamus!,

So I'd make 3.15 [after getting the V.A.T. back] + 1.85

€5.00 profit per marble (based on these workings)

Thanks!

seamus

Query it with Revenue, but I would find it very odd if Revenue forced you to pay VAT at import and then levy VAT on that VAT to the consumer.

MMDeire

Agreed,
Thanks!

Cookie_Monster

MMDeire wrote: »

*Assuming I had to pay 21% on the import (+3.15) for each marble [15+3.15] = €18.15 cost to me), would the government make €7.35 on each marble (-3.15+4.20) and I make only €5 (20-(18.15-3.15))?

Maybe I'm all wrong (and I hope so). Does anyone know?

Essentially you pay a net VAT figure to the Gov every 2 months or so (depends on size of business etc)

You collect 4.20 in VAT and offset the 3.15 you would have had to pay but didn't cos your a business and pay over the remainder to them.

RUDOLF289

Hello MMDeire

The issue of VAT is as follows ;

1) On arrival of the goods from China you will be required to pay the customs duty and the VAT.
2) Customs duty is calculated over the cost of the merchandise (invoice value from your supplier) plus freight cost (if not already included in the invoice from your supplier) plus Cargo/Marine insurance. The level of duty depends on the customs classification of your product.
3) VAT @ 21% is charged on top of Duty plus all of the above.

Please note that for VAT registered traders, VAT paid at the point of entry is a deductible input (i.e. you can claim it back in your VAT return).

In relation to your sales, you levy VAT over your sales price @ 21%. If your turnover is less than 1M euro, you can agree with Revenue to only remit VAT on receipt (rather than on invoice). That is a concession to small businesses. Check with Revenue or your accountant.

Cheers,
Rudolf289