VAT certificate

What is VAT?
VAT is a general or indirect tax levied by the government in recent years. Value-added Tax, abbreviated as VAT, is collected during the production process and the final payer is the consumer. This means that each commodity goes through different stages from the earliest stage of production until it reaches the consumer. In each of these stages, an amount is added to the value of the goods. VAT is levied on this amount. As mentioned, the VAT payer is ultimately the consumer. In other words, the value added tax of each commodity is calculated in proportion to the cost of consumption for its production. This tax is collected in more than 160 countries and is calculated every three months in Iran. The added value of a commodity is usually obtained by subtracting the final value of the commodity from the sum of the value of its raw materials.

Of course, VAT is calculated and received from the beginning of production and   from the time the producer buys the raw materials needed for the product. However, the manufacturer also receives VAT on the product when it is offered. These steps continue until the consumer finally pays the final stage of VAT to the final seller. In this way, the consumer who consumes more, pays more tax in proportion to the number of purchases, and this is a way for the components of the principle of paying more tax by individuals or legal entities that consume more.

Details of VAT laws
In the tax laws of the country, the cases that are subject to this type of tax and the cases that are exempt from it are specified. Of course, these cases may have changes in different years, which are issued in the annual announcements of changes applied by the country's tax affairs organization. In the mentioned laws, materials and notes related to imported and exported goods and whether or not VAT is collected from them, as well as the time and manner of receiving VAT from these goods are also mentioned. The times of filing the VAT return and the penalties related to the delay in submitting the tax return and the payment of the amount of VAT are also mentioned in these laws. In addition, the VAT rate is specified and announced in the announcements of the Tax Affairs Organization every year. But all of the above, in addition to the need to master the laws and regulations of each year, requires constant vigilance about the latest changes made to these laws. What is difficult and somewhat impossible for business owners and business managers. For this reason, it is recommended that you use the tax advisory services to prepare the VAT return and during the payment process, and the management of these matters should be reported to a tax lawyer informed by the reputable tax advisory services.

How to calculate VAT
In tax law, the method of calculating VAT is different from the calculation of other taxes and has its own method of calculation. The fixed formula for calculating VAT is as follows

Tax to be paid to the government = tax paid by the seller - tax received from the buyer

To be more precise, each taxpayer deducts the tax he pays from the tax he receives from the buyer and returns the remaining amount to the government. In this way, the manufacturer and distributor do not pay virtually any tax as value added tax, and this type of tax is collected only from the final consumer.