How to Know How Much VAT I Should Pay: Calculation, Exclusion and MORE

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One of the concerns we have in our day to day, every time we have to make a purchase or payment, is the Value Added Tax; which leads us to wonder how to know how much VAT I have to pay in this situations.

To help you in these cases, we have compiled several information and written this article, which we hope can help you to know how is the calculation done, the products that are exempt and the exclusion certificate, in other aspects.

How to know how much VAT should I pay in Argentina?

The first thing we will mention in this article is what you entered for, in the first place. What we will refer to is knowing how much VAT you must pay.

The Value Added Tax or VAT is, as its name indicates, a Tax that is added to the products we wish to purchase.

This percentage is established by the government of the country itself and the institutions in charge of said policies. Also, this value is added to the total cost of the products or purchases and is reflected before the same authorities of the Argentine government.

The process to know how much VAT you should pay for your purchases is very simple, you don’t have to worry so much.

Normally, when we make the purchase of a product or service, they give us an invoice. This document, which seems simple and often unnecessary, is the key that will allow us to know how much VAT you must pay.

Invoices usually reflect current cost of VAT that is applied to each of the products and services, to obtain the final price of each one.

Likewise, it also reflects in an organized and detailed manner each of the quotes and costs of the final payment that we will make; which will allow us to know in depth the value of VAT.

So, you know, to know how much you must pay in VAT, you must rely on the invoices; therefore, be careful not to lose or throw them away.

In addition, the invoices can be used for other times and procedures, such as the annual declarations and taxes.

How to Know How Much VAT I Should Pay: Calculation

Very good, since you know how to know how much VAT you must pay, we are going to talk about other aspects of this procedure, which can help you in your day-to-day life.

When we talk about VAT, there is an aspect that usually generates many doubts, this is the calculation of the Value Added Tax. How is it calculated? Is there a formula to do it? These are some of the questions that usually arise.

Knowing how VAT is calculated can help you both to calculate at the time of shopping, as to be you who should set the price of the products.

As you will see, it can help you in many ways, depending on which side of the board you are on. If you are the buyer or the seller.

So, the calculation of VAT is very simple, you can do through a few simple mathematical formulas.

The main formula there is for this calculation is the following:

  • Multiply a figure by the established VAT percentage (The VAT value must be expressed in decimal numbers.

Example: Amount x 0.21 (The general VAT rate).

Now if you are looking calculate the price including VAT, the formula will be the following:

  • Amount / 1.21

On the other hand, hThere are other formulas that can also serve you To find out how much VAT you should pay, some are:

  • Output VAT = Sales price * Type of VAT charged on each invoice issued
  • Supported VAT = Sales price * Type of input VAT of each invoice received.
  • Tax to Pay = Output VAT – input VAT.

How to Know How Much VAT I Should Pay: Exempt Products

One aspect that has emerged recently in the country regarding the payment of VAT has been the exemption of several products from this tax. In other words, There are some products or services that are not charged with VAT.

This VAT practice is applied in many other countries, it is something that is usually done; for benefit the welfare of its citizens.

This benefit is obtained because some essential products become more accessible to citizens and an exaggeration in the rise in prices is avoided. Normally, the products that are exempt from VAT are those that belong to the basic food basket.

So, the products that are exempt from VAT are the following:

  • Bread.
  • Sugar.
  • Milk.
  • Yoghurt.
  • Sunflower oil and late blends.
  • Canned fruits, vegetables and legumes.
  • Dry pasta
  • Tea.
  • Rice.
  • Cooked mate.
  • Wheat flour.
  • Yerba mate.
  • Polenta.
  • Batter or breadcrumbs.

Attention! Not all products in the basic food basket are exempt from paying VAT. The only ones that are exempt are those mentioned in the previous list.

How to Know How Much VAT I Should Pay: Exclusion Certificate

Did you know that there is a way to exclude yourself from paying VAT and free yourself from this responsibility? If you consider that paying VAT is beyond your means, you can request an exclusion certificate to avoid paying the Value Added Tax.

The Argentine government has created a service that works to exclude and free citizens from the responsibility of paying VAT; since, these taxes usually represent a high cost for many people and are beyond their possibilities.

In order to belong to this group, you must request and process the VAT Exclusion Certificate granted by the Argentine government.

This certificate gives you the possibility of exempting yourself, totally or partially, from the collection of VAT; as well as payment withholding regimes.

Now, in order to obtain this certificate you must meet a series of requirements:

  • You must cover correctly with the person in charge or representative registered in the Value Added Tax.
  • A document that records all the economic activities that you have carried out to date.
  • Update your fiscal domicile address.
  • Comply with the mandatory duties of submitting the IV Affidavits, corresponding to the last 12 fiscal periods.
  • You cannot have debts or penalties with the AFIP, during the application date.
  • Have a freely available balance, equivalent to 20% of the average tax determined from the last 12 tax returns.
  • You must have a valid Printing Authorization Code (CAI), during the date of the request.
  • You must submit a mandatory affidavit with the information established in General Resolution 3293.

Steps to follow

We already know the requirements to request the Exclusion Certificate, so we must talk about the steps to follow to process this document.

If you know the steps to manage a document, you can make this process simple and pleasant to carry out; since, you will know everything you have to do and nothing will take you by surprise.

So, to help you in this process, we have developed the following list with the steps you must follow:

  1. Make sure you have a stable Internet connection, so that the process is as comfortable as possible.
  2. Enter the AFIP Web Portal, to request a data transfer.
  3. To do this, you must select the option «Access with Tax Code» in the section «Certificates of Exclusion Received / Received from VAT and Exclusion Certificates Received from VAT – Customs ».
  4. Then, the system will issue a receipt that will act as an acknowledgment of receipt.
  5. Finally, after 2 days have passed, you must enter the online system again to know the results of the process.

Check the Certificate

Once you get the exclusion certificate, you can check it whenever you can and make sure it is still in effect.

Considering that this document serves to exempt you from paying VAT tax, It is very important that you always keep it in force; Otherwise, you could lose the certificate and be exposed to pay the tax.

To consult this document, you can do it through the AFIP website. There, you just have to start your session with the fiscal key you have and the VAT Exclusion Certificate will appear on the screen.

What is VAT?

Finally, to end this article, we are going to talk a little about what VAT is; since, we have mentioned it constantly, but we have not delved into the subject.

VAT or Value Added Tax is a Tax that is added to the products we usually buy.

The value to be established for VAT is determined by the government of the country and the competent authorities. In addition to this, the money that is collected with this tax is used for public services and improvements of municipalities and other institutions associated with the State.

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