Concept in Definition ABC

IVA is actually the abbreviation that is commonly used to refer to the Value Added Tax what is a tax indirect about the consumptionand that those who are in Latin America will know it more than well since it applies to most of the purchases that daily They are carried out in the supermarket, in the shopping center and in many other shops, while in Spain, the same tax is called Value Tax Added.

But to better clarify the concept of this particular tax of which most of the Consumers are “victims”, it will be necessary to first delve into the concept of what a tax is indirect.

A Indirect tax is one that will not be received by the treasury directly from the person who bears the burden of the tax, but will be applied in the Transfers for consideration of goods or services, then, who bears the tax burden in definitive accounts will be the final consumer of those goods and services. Each participant in this so-called value-added chain must pay their immediate predecessor the VAT corresponding to the price invoiced for this, but at the same time, he will receive from his successor in this chain, the amount that corresponds to the tax associated with the price that billed. Each participant of this chain as we said, except the final consumer, will be responsible to the

authority corresponding tax to settle and pay as dictated and established by the law trade of each country that applies it, the difference that remains between the VAT paid and the VAT collected, the credit and the debit tax, respectively.

The calculation of VAT is an account that any company or final consumer can perform, since it is an extremely easy calculation. First of all, it will depend on the value that the VAT has in the country in which you want to calculate it, for example in Mexico its value is 15, in Argentina it is 21, then it is multiplied by 15 or by 21 and divided by 100. This amount is incorporated into the initial value of the consumer good to estimate the final increase to be paid by each individual.

This consumption tax is one of the main tax contributions in the Latin American region. While it undoubtedly generates important resources for state coffers that could be useful to the community when managed transparently, the final consumer observes a significant surcharge on the final price that must be paid for each product affected by the VAT. Strategies to reduce the impact include the partial refund of the tax; In the case of Argentina, purchases made by electronic means present a return to the consumer of 5% VAT, with the exception of fuels, in which the amount is lower.

Another proposal to reduce this tax pressure has been to eliminate the tax for certain basic products (milk, bread, water) or for goods such as books or money. software. This is particularly important, especially in nations with inflation high, which multiplies the deleterious effects of VAT on the pocket of the citizen common.

Issues in VAT