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Where is What Tax Paid? | 244 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Where is What Tax Paid?
Authored by: Anonymous on Thursday, May 23 2013 @ 05:20 AM EDT
The money I receive from my employer is taxed yet I get taxed again when I buy
something (dependent on what the thing is) - this sales tax is not a tax on the
seller but on the buyer: all any company is doing when paying this sales tax to
the government is acting as an unpaid (voluntary) revenue collector; company
accounts work on the value net of this sales tax.

In the UK each company in the chain from original material supplier to retailler
only "pays" the part of VAT that relates to the increase in value they
add to their supplied materials that they receive from their customers - they
claim back the VAT on what they buy and pay the VAT on what they sell (which the
buyer pays).

Sales tax is not a tax on a seller, it is a tax on a [retail] customer; Apple
has not paid any of it. In UK:

manufacturer buys materials, VAT is paid by them to supplier which is forwarded
to HMRC
manufacturer sells component it makes to Apple; in doing so it claims back VAT
paid to supplier and pays HMRC VAT paid by Apple.
Apple makes device and sells to customer; in doing so it claims back VAT it paid
to supplier and pays HMRC VAT paid by customer.

So Apple itself has paid no VAT (sales tax): only the final retail customer
does. This leaves the difference between the nett cost of Apple's supplies and
the nett cost of the price for which apple sells its devices, ie income (to
apple), which has not been taxed.

cm

[ Reply to This | Parent | # ]

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