It is the sales tax, or value added as it is also known, it is the tax paid on the highest value added or generated by the person responsible. Although the tax is applied on the sale price of the good or service, in reality, the tax corresponds only to the highest value that is added or generated by the merchant.

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For example, a merchant buys a product for $ 10,000 for which he pays an sales tax of $ 1,900, then sells it for $ 15,000 and charges an sales tax of $ 2,850. At the time of filing your sales tax declaration, the merchant will only pay the difference between the sales tax that gender (2,850) and the sales tax that he initially paid (1,900), which means that the merchant will only pay the sum of $ 950, which is exactly the VAT corresponding to the value that the merchant added to the sold product, since he bought it for $ 10,000 and sold it for $ 15,000, that is, we added a value of $ 5,000 which multiplied by the general rate that is 19% gives a value of $ 950. You can make use of the taxfyle.com/sales-tax-calculator here.

Whoever pays the entire sales tax is the final consumer, since when they cannot sell it or add value to it, they cannot discount the paid sales tax as in the case of the merchant.

The sales tax is an indirect and inequitable tax, since it is a tax that is paid without considering the economic capacity of the taxpayer, since the sales tax must pay it to the poorest citizen that exists, for what is considered a regressive tax.

Iva generator made

The sales tax is generated, and therefore the obligation to collect it is born, when a product that is taxed with the sales tax is sold or a service that is taxed is provided.

Remember that the VAT is charged whenever the person who generates said operation is responsible for the sales tax belonging to the common system.

For example, whoever sells footwear is carrying out the generating act of sales tax because they are selling a taxed product, but if it is from the simplified regime, they do not charge the Iva, but this does not mean that the client does not pay Iva, since the product already has sales tax loaded in the previous stages of purchase sale or production.

Sales Tax Causation

One thing is the fact that generates the sales tax, and another is the causation.

The sales tax is generated when a taxed product is sold, and is caused at the time the sale is made.

The causation is related to the moment in which the VAT must be invoiced and collected, regarding the causation of this tax, article 429 of the tax statute says:

The tax is caused:

  • In sales, on the date of issuance of the invoice or equivalent document and in their absence, at the time of delivery, even though a reservation of title, re-sale agreement or resolution condition has been agreed.
  • In the withdrawals referred to in literal b) of article 421, on the date of withdrawal.
  • In the provision of services, on the date of issuance of the invoice or equivalent document, or on the date of termination of the services or payment or payment on account, whichever is earlier.
  • In imports, at the time of nationalization of the good. In this case, the tax will be settled and paid together with the settlement and payment of customs duties.