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Value Added Tax - VAT Inclusive / VAT Exclusive Prices
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Value Added Tax (VAT) will be implemented 1st January 2013, 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 4293745 or email us at vat@src.gov.sc.
The Value Added Tax Act, 2010 is available here.
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