VAT on invoices
Posted: Sun Dec 22, 2024 7:00 am
When you decide to start a self-employed activity, the first thing you need to know is the tax obligations to which you will be subject. One of them is the collection and management of VAT .
Both self-employed persons and companies are, in general, subject to VAT . This means that the invoices they issue for sales or services provided must be subject to VAT.
The tax consists of applying a percentage to the tax base (the tax base is the amount that indicates the cost of the operation malaysia whatsapp number carried out), which will be 21% (general rate), 10% (reduced rate) or 4% (super-reduced rate) depending on the nature of the operation.
Thus, the function of VAT is to be a tax that the company collects for the State , therefore, it should not be considered as income, because it is not.
Every three months, the self-employed worker must pay the Tax Agency the difference between the tax charged to his clients in the income invoices and the tax incurred in the invoices for expenses necessary to carry out the economic activity.
Activities exempt from VAT
There are a number of activities that are exempt from VAT; that is, the service provider does not have to pass on the tax to the recipient.
In article 20 of Law 37/1992 (VAT Law) you can see a list of all of them. Here we leave you most of them:
Teaching services , provided by public or private entities authorized by the State, the Autonomous Communities or other public entities.
The education of children and youth, up to university and graduate levels.
Both self-employed persons and companies are, in general, subject to VAT . This means that the invoices they issue for sales or services provided must be subject to VAT.
The tax consists of applying a percentage to the tax base (the tax base is the amount that indicates the cost of the operation malaysia whatsapp number carried out), which will be 21% (general rate), 10% (reduced rate) or 4% (super-reduced rate) depending on the nature of the operation.
Thus, the function of VAT is to be a tax that the company collects for the State , therefore, it should not be considered as income, because it is not.
Every three months, the self-employed worker must pay the Tax Agency the difference between the tax charged to his clients in the income invoices and the tax incurred in the invoices for expenses necessary to carry out the economic activity.
Activities exempt from VAT
There are a number of activities that are exempt from VAT; that is, the service provider does not have to pass on the tax to the recipient.
In article 20 of Law 37/1992 (VAT Law) you can see a list of all of them. Here we leave you most of them:
Teaching services , provided by public or private entities authorized by the State, the Autonomous Communities or other public entities.
The education of children and youth, up to university and graduate levels.