TAXES. !

DIRECT AND INDIRECT TAXES. !

The VAT

IES Plurilingüe Eusebio da Guarda

Entrepreneurship Workshop

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WHAT IS A TAX?

A tax is a levy (a charged imposed and collected) on a good, a business or an estate. !

On a good... for example if you buy something: a computer, a pen, a donut…

On a business... for example if you are a carpenter, or if you are selling ice-creams.

On an estate... for example if you have got a land.

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TYPES OF TAXES (I)

!!•Directs: Taxed income and wealth. !They are paid directly (tributary to the Treasury), such as personal income tax (income tax of natural persons), or IBI (property tax).

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TYPES OF TAXES (II)

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•Indirects: They tax consumption. !The Treasury indirectly perceives, thus they are charged by the marketing chain. The final consumer finances. Such is the tax on gasoline, the VAT, etc.

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THE VAT (VALUE ADDED TAX)

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•In Spain the most popular indirect tax is the VAT: Impuesto del Valor Añadido. •You will pay this tax on all purchases of items you buy, and all services you hire. •There are three types of imposition: 21%, 10% and 4%.

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21% VAT

•It is the ‘General Type’. •Examples: If you buy a car, a computer, a dress, a trouser, tobacco, beer, a phone, a pen (school supplies), cosmetics, etcetera. If you send a packet with a shipper, if you go to the hairdressing, if you need to repair your heating machine…

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10% VAT

•It is the ‘Reduced Type’. •Examples: Substances and products used to the human (or animal) nutrition, like pizza, burgers, cakes,… Drink water, irrigation water,… Glasses and contact lenses,… Carriage of passengers and their luggage. Camping, hotel services, restaurants,… Museum tickets, sports spectacles.

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4% VAT

•It is the ‘Super reduced type’. •Only for some articles. •Examples: Bread, milk, cheese, eggs, fruits, vegetables, legumes, potatoes. Books, papers and reviews, maps,… Medicines for human use.

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VAT EXEMPT

•Educational services. •Insurance. •Sports services •Public postal services. •Second hand goods. •Health services.

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AND NOW… YOUR TURN!

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IES Plurilingüe Eusebio da GuardaEntrepreneurship Workshop

October 2014