What is the VAT apportionment rule and what rates exist?
Posted: Thu Dec 26, 2024 5:08 am
The VAT apportionment rule is an adjustment system that must be applied by taxpayers who carry out taxable and exempt transactions in the same fiscal year.
This adjustment consists of calculating the proportion existing between the operations that give the right to deduct VAT, in relation to the total volume of operations carried out in the year.
The calculation of the pro rata originates from the precept that establishes that the VAT incurred in exempt activities is not deducted as such, but rather as a higher cost of the operation .
In short, the VAT apportionment rule allows you to determine to what extent a company can deduct the VAT incurred on its purchases and expenses, considering the france whatsapp number data proportion between the taxed and non-taxed transactions it carries out.
Types of prorations
There are two types of apportionment: general and special.
The general apportionment
It is the percentage of invoices that are subject to VAT with respect to the total invoiced and is calculated based on the following calculation:
General apportionment = (Income from taxable operations / Total income) x 100.
To perform this calculation, the taxable bases of the invoices will be taken as a reference. The percentage obtained as a result is the one that will be applied to the VAT on expenses to establish the amount to be deducted.
This adjustment consists of calculating the proportion existing between the operations that give the right to deduct VAT, in relation to the total volume of operations carried out in the year.
The calculation of the pro rata originates from the precept that establishes that the VAT incurred in exempt activities is not deducted as such, but rather as a higher cost of the operation .
In short, the VAT apportionment rule allows you to determine to what extent a company can deduct the VAT incurred on its purchases and expenses, considering the france whatsapp number data proportion between the taxed and non-taxed transactions it carries out.
Types of prorations
There are two types of apportionment: general and special.
The general apportionment
It is the percentage of invoices that are subject to VAT with respect to the total invoiced and is calculated based on the following calculation:
General apportionment = (Income from taxable operations / Total income) x 100.
To perform this calculation, the taxable bases of the invoices will be taken as a reference. The percentage obtained as a result is the one that will be applied to the VAT on expenses to establish the amount to be deducted.