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Value Added Tax - VAT Inclusive / VAT Exclusive Prices
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When Value Added Tax (VAT) is introduced on July 1st 2012, and if you are registered for VAT and are selling goods and
services that are VATable, you will need to calculate the value added tax. If you advertise prices exclusive of VAT,
you will need to work out how much VAT to add. If you advertise your prices inclusive of VAT, you will need to work out
how much VAT to record in your VAT account.
If you are registered for VAT and you want to claim VAT back on your purchases, then you will find that sometimes
goods and services that are VATable are sold inclusive of VAT but the receipt may not show the amount of VAT included
in the total. In this case, in order to claim back the VAT on your purchase, you will need to calculate the VAT from
the VAT-inclusive amount.
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How to Calculate VAT-Inclusive Price?
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After the selling price of a good or a service has been decided without VAT, the VAT needs to be added to the selling
price by multiplying it by 15% to get the VAT-inclusive price.
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How to use the VAT fraction to calculate the VAT in a VAT-inclusive price?
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When VAT is calculated from a VAT-inclusive price, the following fraction (price x 15/115) will be applied to calculate
the VAT amount. By using this 'VAT fraction' the VAT-registered business will be able to find the amount of VAT
that has been incorporated in a VAT-inclusive price.
Fraction for calculating the standard rate of VAT-Inclusive prices
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Rate of VAT
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VAT fraction
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Standard rate = 15%
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Price × (15÷115)
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Fractions for calculating the standard-rate VAT in VAT-inclusive prices
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Step
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Amount
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VAT-inclusive price
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SR 115
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SR 115 x 15÷115
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SR 15
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How to calculate VAT-Exclusive Price?
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The standard rate of VAT is 15%. Using a SR 115 VAT-inclusive price with a standard VAT rate at 15%, the VAT-exclusive
price will be obtained by dividing the VAT-inclusive price by 1.15.
Example at 15% - calculating the VAT-exclusive price
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Rate of VAT
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Calculating VAT-Exclusive price
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Standard rate - 15%
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VAT Exclusive Price ÷ 1.15
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Example at 15% - for calculating the VAT-exclusive prices
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Step
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Amount
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Price including VAT
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SR 115
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Price excluding VAT (SR115 ÷1.15)
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SR 100
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For more information
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You can contact Seychelles Revenue Commission on 4293737 or email us at advisory.center@src.gov.sc.
The Value Added Tax Act, 2010 is available here.
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