Hei! Myseld and a few others are running a coffee shop and I was wondering how much of a tax return I would get if I bought a new coffee machine. Would we get the full 24% from the price of the coffee machine back? (Or is it 20% for businesses for 2014?). I asumme the machine would have to be new rather then used, right?
Isn't this concept the reagoin why taksi drivers drive new fancy cars?
Cheers!
New business owner wondering about tax return
Re: New business owner wondering about tax return
Vat is vat received - vat paid so if you buy things with 200e vat and sell things with vat 200e you pay nothing, that would mean you dont make any profit and will go under soon tho.
Taksi drivers get help on car tax and other, if you arent planning to get taxi then dont bother yourself on that.
There is reason why B to B tells their prices withouth Vat. That is illegal in B to C trade.
Simple example. (not mathemically sound but close enough)
You buy 124e machine including 24e vat.
You sell 100 coffees for 248e including 48e vat.
You pay 24e vat to goverment because you paid 24e already when you bought machine. Thats how vat works.
Profit 100e.
Cba to make real calculations, example is near enough.
And for used equipment, if its from business it does include VAT or in rare cases "marginal taxation". From private its marginal taxation.
I dont really know how marginal taxation works so thats something you have to ask from your bookkeeper.
Taksi drivers get help on car tax and other, if you arent planning to get taxi then dont bother yourself on that.
There is reason why B to B tells their prices withouth Vat. That is illegal in B to C trade.
Simple example. (not mathemically sound but close enough)
You buy 124e machine including 24e vat.
You sell 100 coffees for 248e including 48e vat.
You pay 24e vat to goverment because you paid 24e already when you bought machine. Thats how vat works.
Profit 100e.
Cba to make real calculations, example is near enough.
And for used equipment, if its from business it does include VAT or in rare cases "marginal taxation". From private its marginal taxation.
I dont really know how marginal taxation works so thats something you have to ask from your bookkeeper.
Caesare weold Graecum, ond Caelic Finnum
Re: New business owner wondering about tax return
VAT on coffee is only 14%.
It's kind of weird that you are asking this question because the purchase VAT you would pay on the coffee machine works in EXACTLY the same way as the purchase VAT you pay on coffee, milk, sugar, cups, spoons etc when you buy all your supplies. No different.
Yes, the purchase VAT is deductible from the sales VAT you receive from your customers in order to calculate what you owe to Vero.
If the machine is a very expensive one (eg over 1500 euros) then you could depreciate it over a few years, so that your business doesn't take the full hit against it's profits (because you are going to use the machine for more than one year). However, I see little point in doing that and even if you do decide to depreciate the machine over 3 years, you can still deduct all the VAT in the current year. Ask your bookkeeper.
It's kind of weird that you are asking this question because the purchase VAT you would pay on the coffee machine works in EXACTLY the same way as the purchase VAT you pay on coffee, milk, sugar, cups, spoons etc when you buy all your supplies. No different.
Yes, the purchase VAT is deductible from the sales VAT you receive from your customers in order to calculate what you owe to Vero.
If the machine is a very expensive one (eg over 1500 euros) then you could depreciate it over a few years, so that your business doesn't take the full hit against it's profits (because you are going to use the machine for more than one year). However, I see little point in doing that and even if you do decide to depreciate the machine over 3 years, you can still deduct all the VAT in the current year. Ask your bookkeeper.