√ VAT: Definition, Object, Subject, Formula and Examples
VAT: Definition, Object, Subject, Formula and Examples - On this occasion About Knowledge will discuss about VAT. Which in this discussion explains the meaning of VAT, object, subject, formula and examples briefly and clearly. For more details, see the following article.
VAT: Definition, Object, Subject, Formula and Examples
Value added tax is abbreviated as VAT. This type of tax provides an explanation that basically every good or service will be taxed. However, there are some provisions in it. These provisions are regulated in the Law (UU).
The law governing this VAT is in Article 4A of Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and also the Sales Tax on Luxury Goods as amended several times, most recently by Law (UU) Number 42 Years 2009.
Definition of VAT
The definition of VAT (Value Added Tax) can be explained in more detail by separating the constituent words. Value added tax is composed of three (3) words, namely tax, increase and value.
Taxes are contributions paid by the public to the state for everything they own. This fee is given to the state by the public to increase the state treasury with the aim of helping the national development run. This tax is given to the state with the provisions stipulated in the law.
Increase in this case relates to increase in an aspect or field. In terms of taxes, the increase in question is usually related to goods or services.
While this value can be interpreted as a price, but the value also describes an order that becomes the benchmark for results. However, the value discussed in taxation is not such a value. The value referred to here is the value associated with goods or services, for example motorcycles and cars.
Based on the explanation described above, Value Added Tax can be explained as a tax or fee that must be provided by the public to the state in accordance with the added value of the goods and services provided has.
In simpler terms (VAT) this value added tax is a tax imposed on the public for the added value of the goods or services they own. This added value relates to its distribution to producers as well as consumers.
Subject and Subject to Value Added Tax (VAT)
This value added tax has its own subject and taxpayer. Between the subject and the value added tax payer are two things that are interrelated with one another. Subjects included in this value added tax subject are as follows:
- Taxable Entrepreneurs (PKP) who deliver taxable goods/taxable services within the region customs clearance and also exports tangible taxable goods/intangible taxable goods/services tax.
- Small Entrepreneurs who choose to be confirmed are Taxable Entrepreneurs (PKP)
Goods and Services Not Subject to Value Added Tax (VAT).
Subjects in the value added tax are goods and services. But not all goods or services are subject to value added tax. So there are several forms of goods and services that are not subject to tax.
Goods Not Subject to Value Added Tax
Basically everything is taxable. However, the law has stipulated that there are exceptions for certain types of goods. Regarding the types of goods that are not subject to tax, this has been regulated in government regulations. The grouping of goods that are not taxable include the following:
- Mining, quarrying and drilling products, which are taken directly from the source, such as kerosene, natural gas, geothermal and so on.
- Basic goods that are needed by the general public. for example, such as rice, sago, soybeans, salt, corn, and so forth.
- Food and drinks served in hotels, restaurants, restaurants, stalls, and the like include food and drinks whether consumed on site or not.
- Money, gold bars, and securities (stocks, bonds and others).
Services Not Subject to Tax
Like goods, not all services are subject to tax. These exceptions have been regulated by law. Services that are not subject to tax are regulated in the Value Added Tax Law (UU VAT). In Law no. 42 of 2009, there are several groups of services that are not subject to value added tax (VAT).
The grouping of these services is as follows:
- Health services and medical services
- Social services
- Insurance services
- Mail delivery service using postage
- Religious services
- Financial services
- Public transportation services
- Educational services
- Hospitality services
- Labor services
- Arts and entertainment services.
In general, the services mentioned above are services that provide benefits to the general public.
Value Added Tax Objects
Besides having a subject, in a value added tax there is also an object. The object of Value Added Tax (VAT) has been regulated in the law. The law that regulates value added tax objects is Law no. 42 of 2009. This law came into effect on April 1, 2010.
Value added tax (VAT) is imposed on the following objects:
- Delivery of Taxable Goods in a Customs Area carried out by Entrepreneurs.
- Import of Taxable Goods.
- Submission of Taxable Services in a Customs Area carried out by Entrepreneurs.
- Utilization of an Intangible Taxable Goods from outside the Customs Area within the Customs Area.
- Utilization of Taxable Services from outside the Customs Area within the Customs Area.
- Export of Tangible Taxable Goods by Taxable Entrepreneurs.
- Export of an Intangible Taxable Goods by a Taxable Entrepreneur.
- Export of Taxable Services by Taxable Entrepreneurs.
Basis for Calculation of VAT Tax Rates and Their Formulas
In this value added tax (VAT), there are several things that form the basis for imposing the tax rate. The basis for the imposition of this tax rate is as follows:
- Selling price
- Replacement
- Import value
- Export value, and others.
Value-retained tax rates are as follows:
The lowest rate of Sales Tax on Luxury Goods is 10% (ten percent) and the highest rate is 75% (seventy five percent).
The export of taxable goods classified as luxury is taxed at a rate of 0% (zero percent).
The formula used in calculating this tax is as follows:
- VAT = 10% × selling price
- VAT = 10% × replacement
- VAT = 10% × selling price
- VAT = 10% × import value
- VAT = 10% × export value
The use of the formulas above has been adjusted to the tax base to be determined.
Examples of Tax Questions
A taxable entrepreneur sells taxable goods with a selling price of Rp. 80,000,000. determine how much value tax is owed!
Completion:
It is known: the selling price of BKP = IDR 80,000,000
Asked: VAT…?
Answer :
VAT = 10% × selling price
VAT = 10% × IDR 40,000,000
VAT = IDR 8,000,000
Thus the explanation about VAT: Definition, Object, Subject, Formula and Examples. Hopefully it can be useful and add to your insight. Thank You.
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