Home » Business » What does VAT exposed mean and why it is important to know

What does VAT exposed mean and why it is important to know

When we make a purchase, we are used to finding a clear indication of the price to pay. In fact, in any shop, each item displayed has its own tag that specifies the cost. But it’s not always like this. When we are looking for a car, for example, we can come across a price with an exposed VAT indication. What exactly does this term mean? Can the car benefit from preferential taxation? Or will we have to add a percentage of taxes to the indicated price? In this article we will try to understand what VAT exposed means and why it is important to know. We will also see what changes in the application of VAT to an employee or retiree compared to a self-employed person.

VAT exposed: is it convenient for employees or the self-employed?

The wording IVA exposed, often abbreviated to ie, indicates that the price of the asset already includes VAT. Whether it’s a car or a TV, a computer or a vacation package, VAT exposed means the price is final. In short, it is just like at the supermarket: the price indicated is what we will pay at the checkout. But then, why do we find this indication only for some goods? To truly understand what VAT exposed means and why it is important to know, we need to understand what VAT is. Value added tax is the most common example of indirect tax and affects the final consumer. For employees, therefore, it is simply a voice that determines the final price of an asset. So, let’s go back to the automobile example. If the asking price is 15,000 euros VAT exposed it means that to buy the machine we will have to pay 15,000 euros. But this is not the case for everyone.

What does VAT exposed mean and why it is important to know

In fact, for VAT holders, the car could cost much less. In the case taken as an example, 3,300 euros. Why this difference? We have seen that VAT only affects the final consumer. A professional or entrepreneur who buys a car for work will no longer be a consumer but a professional user. For this you can deduct the cost of the car, discharging the VAT. Normally self-employed workers have a clear understanding of what VAT exposed means and why it is important to know. This tax advantage, however, does not extend to holders of a flat-rate VAT number. These workers will have to pay for the car in full without being able to download any costs.
The editorial staff of ProiezionidiBorsa advises readers to always evaluate with a professional the methods of deduction and tax deduction. The correct application of the VAT rules is in fact carefully monitored by the Revenue Agency. You can find out why in a our study.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.