Input VAT vs Output VAT

What is input VAT?

Input VAT (or more generally “input tax”) is the amount of Value Added Tax (VAT) that a business pays on the goods and services it purchases for its business operations. It is called “input” VAT because it is the VAT paid on the inputs or purchases used by the business to produce goods or provide services.

• What is output VAT?
• How does input and output VAT determine VAT liability?
• Is every sale subject to output VAT?
• Can the input VAT always be used to offset output VAT?
• Can the tax authorities reject an input VAT deduction for a valid business purpose?
  • Lack of an invoice
  • The supplier VAT number is invalid
• How can we help?

Source: www.fonoa.com

 

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