Яндекс.Метрика
qr-код - Как-то так стрелка - Как-то так
Leading Economist + ... пиктограмма - Как-то Так THIS     Economic literacy and web solutions
All on the topic: what, how and why. Actual things - in their own words.
Turn your quality WITH ME - BUTW !
If you don't like what you get, change what you give. © Carlos Castaneda     KAKTOTAK.BY - economic design and web development services (php/js - telegram, WordPress, Laravel, Vue, SEO)    Cooperation - on an ongoing basis    Be in the topic   -    SUBSCRIBE      My notes are ECONOMICS +  и  WEB Developer's Guide | php+js+seo   в Telegram   telegram  

Why VAT is not taken into account when evaluating investment projects

Why VAT is not taken into account when evaluating investment projects

When you develop a business plan for your project, the basis for calculating its performance indicators is the price of products (excluding VAT), the price of raw materials (without VAT), the price of services (without VAT), capital investments (without VAT), etc.

All of the above price factors should be cleared of VAT, i.e. not take it into account when evaluating the effectiveness of investments, since this indirect tax is neither a profitable nor a costly element of the project, which can directly affect both its profitability and its capital value.

VAT paid by the organization, whether in the price of raw materials, capital costs, etc., at the end of the reporting period the offset method either returns the overpaid amount from the budget, or not, depending on the amount of VAT received in the organization's revenue for the same period.

Imagine the situation.

You have an organization. You bought an imported machine for 5,000 thousand rubles.$ and paid VAT for it at customs = $ 1,000. During the same month, your organization received revenue from products sold for $40,000 thousand, including VAT. VAT in the amount of revenue amounted to $ 7,000 thousand. That is, the organization pays VAT to the budget for the reporting month not $ 7,000, but 6 000 $ (7 000 $ - 1 000$).

In other words, the state returns the VAT to the organization according to the offset method previously paid to it. This indicates that it does not relate to the actual costs of the project.

The only impact on efficiency in this context can only be the financial costs of the organization (crediting deficits), which may arise due to the need for a temporary outflow of money to pay VAT and cover this outflow with any loans or credits until VAT is refunded.

Of course, there are exceptions at the legislative level, according to which VAT should relate to the costs of a certain asset and is not deductible/offset, but these are isolated cases for certain business conditions.

автор - Михаленко Р.
M R. Автор - kaktotak.by Specialization: financial and economic design - modeling of business, investment projects of the real sector, analysis and evaluation of efficiency, optimization of the management decision system.

A wide range of web-based competencies for solving business problems.

Subscribe to my telegram channel - My notes are ECONOMICS +
Improve your quality with me - what, how and why in economics in a simple way. Micro and macro aspects.

And also - WEB Developer's Guide | php+js+seo
Notes and native solutions to simple local tasks in PHP, JS. Something about Laravel, WordPress, Vue and SEO.

  Personal assistance in economic design and web development:

  • Financial and economic modeling, analysis, accounting, business planning
  • Comprehensive web development/project support on the web (php/js, seo – Laravel, WordPress, Vue, telegram, administration, content, advertising in Yandex Direct

  telegram или форма обратной связи

Administrator
47
0
Name
E-mail
Rating
Review

Currency Converter
RUB RUB-icon
USD USD-icon
EUR EUR-icon
CNY CNY-icon
BYN BYN-icon
UAH UAH-icon
KZT KZT-icon
SHORT- what is it about
ECONOMIC LITERACY
  Simple online solutions to problems of economics and finance  
I Want To Know Everything. Useful Tips