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How is the sales tax calculated?

The calculation of VAT is based on the contract under the law of obligations concluded between the supplier and the recipient of the service. The decisive factor is whether a net price or a gross price was agreed between the contracting parties (so-called net price or gross price agreement). Depending on this, the VAT is determined by applying the applicable tax rate (19 % or 7 %) to the net amount or by deducting it from the gross amount

Example:
A tradesman repairs the entrance door of a retail shop. He agrees a price of € 500 net with the owner.
The repair carried out is subject to VAT. The assessment basis for the tax calculation is € 500. The turnover tax amounts to € 95 (19 % of € 500).



In the case of so-called gross prices, the sales tax is calculated by subtracting it from the total amount.

Example:
A bookshop sells a paperback book (reduced tax rate of 7 %) at a price of 10.70 €. The sales tax included in the price is calculated by deducting it from the gross price (7/107 of 10.70 €) and amounts to 0.70 €.

 

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