At 02:08 PM 2/15/2006, Harold Hallikainen wrote: >I assume a reseller deducts only the VAT paid on items he/she actually >resells. Do inventory control systems maintain a separate field for the >VAT portion of the cost of goods sold? Seems like there'd be a danger of >someone deducting "paid VAT" on stuff that was used instead of resold >(there's a similar problem with sales tax in buying stuff for resale, then >using it instead). The Canadian version of the VAT is called the GST (Goods & Services Tax). Providing that it has a valid GST number, all GST paid by an organization is deductible. This does make things pretty simple: the GST remitted to the tax man is simply the amount of GST charged minus the GST paid out for ALL expenses. IOW: Tax remitted/refund = tax charged - tax paid. This can lead to an interesting situation where one gets back a GST refund cheque because the money paid out exceeds what was charged. More than a couple of those prompts a call from the tax man . . . I used to be the Treasurer of a local special interest group that was funded by membership dues as well as Government grants. The executive director was treated as a paid consultant who charged GST. We paid out the GST charged on his invoices, then claimed most of it back as a GST refund. Had to show supporting documentation each of the many times the GST people (who were ALWAYS friendly and helpful and polite) called to check on that most unusual situation. The Canadian GST is a pretty simple system - much simpler and much more fair than the old Federal Sales Tax it replaced. dwayne -- Dwayne Reid Trinity Electronics Systems Ltd Edmonton, AB, CANADA (780) 489-3199 voice (780) 487-6397 fax Celebrating 22 years of Engineering Innovation (1984 - 2006) .-. .-. .-. .-. .-. .-. .-. .-. .-. .- `-' `-' `-' `-' `-' `-' `-' `-' `-' Do NOT send unsolicited commercial email to this email address. This message neither grants consent to receive unsolicited commercial email nor is intended to solicit commercial email. -- http://www.piclist.com PIC/SX FAQ & list archive View/change your membership options at http://mailman.mit.edu/mailman/listinfo/piclist