Sales tax is an indirect tax on consumption. It applies to a large part of the goods and services consumed in the country. Businesses charge Sales tax to their customers, so consumers pay this tax, not corporations. It is important to know the different Sales tax rates so as not to make errors in the invoicing of customers. A good way to avoid making mistakes and being surprised by legislative changes is to rely on the advice of an accountant. You can visit taxfyle.com/sales-tax-calculator for the proper tax calculation in this matter.
Understand the usefulness of Sales tax thanks to the advice of an accountant
Sales tax, value added tax, is an indirect tax on consumption which generally applies to all goods and services consumed in the country. Companies are responsible for collecting this tax for the state. They therefore charge Sales tax to their customers, at different rates, and then pay it back to the Treasury, deducting what they paid on their purchases. Ultimately, it is the final consumer who pays the Sales tax and not the companies which encourage the production of goods and services. A chartered accountant can, thanks to his knowledge of tax matters, advise the business creator in his financial management and the preparation of his Sales tax returns.
What are the different Sales tax rates in the country?
In The country, there are four different rates for calculating Sales tax. The standard rate is 19.6% and concerns the vast majority of sales of goods and services. The reduced rate of 7% is reserved for goods and services which were subject to the 5.5% rate before January 1, 2012, with the exception of certain goods and services listed below. Then, the reduced rate of 5.5% is applicable inter alia to food products and to gas and electricity subscriptions. Finally, the special rate of 2.1% concerns certain products and services, including the television license fee. The website of the Ministry of the Economy and Finance presents the complete list of goods and services with the different applicable Sales tax rates. Please note, on January 1, 2014, these rates will be changed: the reduced Sales tax rate will drop from 5.5% to 5%, the intermediate rate will be increased from 7 to 10% and the standard rate will be raised from 19.6 to 20 %.
The regulatory field, in which Sales tax is entered, as in general the various tax systems in the country, is changing very rapidly. It is imperative to keep yourself regularly informed of upcoming developments and the impacts on the daily management of your business. That is why the help of an accountant is highly recommended in order to stay in compliance with the law.