Have you heard of Maurice Lauré? No?!
Yet everybody knows his invention... Each and every one of us has already been financially involved in his invention.
That’s right... it’s VAT, or value added tax. This revolutionary tax was actually created in France.
Starting in the 1960s, VAT started to conquer the world and is now present in more than 150 countries.
Did you say VAT?
Added value is defined as the difference between the end value of an item (value added by the turnover) and the value of the goods that were consumed during the production process (intermediate consumption, such as raw materials, salaries, administrative costs etc.).
It quantifies the increase in value that the company generates thanks to what it does to the intermediary goods and services that come from third parties (its suppliers).
In other words, the difference between the value of the end product and everything that has been used to create it.
Who is liable for VAT and who actually pays it?
You and I, as private individuals, pay VAT, but what mechanisms are in place for the government to collect it?
VAT is an indirect tax, and so there is a distinction between who is liable for the tax and who pays the tax. Indirect taxes are owed by businesses or individuals who are liable, but they are passed on to the retail price of a product. This means that they are borne by another person, the person who actually pays the tax.
So VAT is owed by businesses liable for VAT, but fully paid for by the end consumers, the people who pay the tax, who are not known to the tax authorities.
Can Adfinity help me submit my return to the tax authorities?
With Adfinity, you can do a VAT configuration so that your VAT return is calculated automatically depending on your company’s transactions.
Using version 5.50, Adfinity can print out French VAT returns.
It’s easy to print out a French VAT return with the boxes already filled in. All the user has to do is send it on to the authority responsible for collecting VAT.
In the next few months, Adfinity will be able to issue this VAT return electronically, as it has already been the case for a while in Belgium.
