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TAXES (PART II) 
! 
The VAT chain 
Entrepreneurship Workshop 
IES Plurilingüe Eusebio da Guarda 
1
REMEMBERING INDIRECT TAXES 
! 
•An indirect tax is applied on your consumption. 
! 
The Treasury indirectly perceives the ...
THE VAT CHAIN. AN EXAMPLE 
Suppose the market of fish from the fisherman to 
the consumer. 
Then the VAT (“IVA”) will be… ...
•Every person (or company) who sells fish will 
charge a 10% VAT. 
• The fisherman charges his price and 10% tax. 
• For e...
! 
• The wholesaler charges his price and 10% tax. 
• For example, he/she decided to sell fish at a 
price 150 €. 
• Then ...
! 
• The retailer charges his price and 10% tax. 
• For example, he/she decided to sell fish at a price 
200 €. 
• Then th...
7 
THE VAT CHAIN. AN EXAMPLE 
IVA paid IVA received Total VAT 
Fisherman - 10 € 10 € 
Fish Wholesaler 10 € 15 € 5 € 
Retai...
AND NOW… YOUR TURN! 
8 
Entrepreneurship Workshop 
IES Plurilingüe Eusebio da Guarda 
October 2014
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Spain taxes: the VAT chain

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Spain taxes: the VAT chain

  1. 1. TAXES (PART II) ! The VAT chain Entrepreneurship Workshop IES Plurilingüe Eusebio da Guarda 1
  2. 2. REMEMBERING INDIRECT TAXES ! •An indirect tax is applied on your consumption. ! The Treasury indirectly perceives the money. ! They are charged by the marketing chain. ! The final consumer finances. Such is the tax on gasoline and fuels, the VAT, special tax on tobacco, special tax on alcoholic drinks, etc. 2
  3. 3. THE VAT CHAIN. AN EXAMPLE Suppose the market of fish from the fisherman to the consumer. Then the VAT (“IVA”) will be… 10%. ! ! 3
  4. 4. •Every person (or company) who sells fish will charge a 10% VAT. • The fisherman charges his price and 10% tax. • For example, he/she decided to sell fish at a price 100 €. • Then the VAT will be: 100·10/100 = 10€ • Fisherman bill will be 100 + 10 = 110€! ! 4 THE VAT CHAIN. AN EXAMPLE
  5. 5. ! • The wholesaler charges his price and 10% tax. • For example, he/she decided to sell fish at a price 150 €. • Then the VAT will be: 150·10/100 = 15 € • The wholesaler bill will be 150 + 15 = 165 €! ! 5 THE VAT CHAIN. AN EXAMPLE
  6. 6. ! • The retailer charges his price and 10% tax. • For example, he/she decided to sell fish at a price 200 €. • Then the VAT will be: 200·10/100 = 20 € • Retailer bill will be 200 + 20 = 220 € ! • You (the consumer) have bought the fish paying 220€: 200€ is the final price and 20€ are the taxes.! ! 6 THE VAT CHAIN. AN EXAMPLE
  7. 7. 7 THE VAT CHAIN. AN EXAMPLE IVA paid IVA received Total VAT Fisherman - 10 € 10 € Fish Wholesaler 10 € 15 € 5 € Retailer 15 € 20 € 5 € Consumer 20 € 20 € ! • At the end…Who paid the VAT? • Who collects the money for the Treasury?! !
  8. 8. AND NOW… YOUR TURN! 8 Entrepreneurship Workshop IES Plurilingüe Eusebio da Guarda October 2014

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