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Value Added Tax - VAT Inclusive / VAT Exclusive Prices

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.

How to Calculate VAT-Inclusive Price?
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.

How to use the VAT fraction to calculate the VAT in a VAT-inclusive price?
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

Rate of VAT

VAT fraction

Standard rate = 15%

Price × (15÷115)

Fractions for calculating the standard-rate VAT in VAT-inclusive prices

Step

Amount

VAT-inclusive price

SR 115

SR 115 x 15÷115

SR 15



How to calculate VAT-Exclusive Price?
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

Rate of VAT

Calculating VAT-Exclusive price

Standard rate - 15%

VAT Exclusive Price ÷ 1.15

Example at 15% - for calculating the VAT-exclusive prices

Step

Amount

Price including VAT

SR 115

Price excluding VAT (SR115 ÷1.15)

SR 100



For more information
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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