value added tax

(redirected from Impuesto al Valor Agregado)
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value added tax (VAT)

a tax on consumer expenditure collected on business transactions, imports from outside the EU and acquisitions from other EU countries. All EU countries apply VAT in accordance with the Sixth Directive. Many non-EU countries have adopted a tax very similar to VAT, e.g. Mexico, Russia, New Zealand and Australia. The UK law is based upon the Value Added Tax Act 1994, statutory instruments made under that Act and parts of certain VAT notices published by HM Revenue & Customs which are law because of powers given by statutory instrument. The main charge to VAT applies where there is a supply of goods or services in the UK, or the Isle of Man, by a taxable person in the course or furtherance of business and the supply is not specifically exempted. A taxable person is any individual, partnership, company or other entity which is registered for VAT, or ought to be registered because of making taxable supplies above certain value limits. A person who makes taxable supplies below these limits can register voluntarily in order to recover VAT incurred on purchases of goods and services (inputs) related to making those taxable supplies.

There are three rates of VAT: a standard rate, a reduced rate and a zero rate. There is a fundamental distinction between zero-rating and exemption because a business making zero-rated supplies can recover all the related INPUT TAX whereas the VAT incurred on goods and services acquired in order to make exempt supplies cannot be recovered and forms an additional cost to that business. Even businesses which could otherwise reclaim VAT on their inputs cannot normally do so in respect of cars and business entertainment. All taxable persons must keep and preserve records and accounts of all taxable goods and services which they receive or supply in the course of their business, as well as records of any exempt supplies that they make. Such records must normally be kept for six years. There are a range of financial penalties and interest charges to encourage people to register for VAT on time, to send in accurate VAT returns and to make payments on time.

References in periodicals archive ?
1 393 de 2010 son: un impuesto especifico al consumo ajustado anualmente por IPC, que en 2015 era de COP $658,91 (COP, pesos colombianos) por cajetilla de 20 unidades (que incluye un componente de destinacion especifica administrado por los Institutos Deportivos Territoriales); un impuesto ad valorem de 10% (denominado sobretasa al consumo, con destino especifico a financiar aseguramiento en salud), calculado sobre un precio base certificado por el Ministerio de Hacienda, y el impuesto al valor agregado (IVA) de 16%.
En el ano 2003, la Corte Constitucional se pronuncio acerca de la exequibilidad de una ampliacion del impuesto al valor agregado (IVA) hacia alimentos de consumo diario.
Vehicles that are eight or nine years old will pay a 10% duty, plus a value-added tax (impuesto al valor agregado, IVA).
En Chile las dos principales fuentes de recaudacion tributaria son el impuesto al valor agregado (IVA) e impuesto a la renta.

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