An entity purchases products from a foreign entity.


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An entity purchases products from a foreign entity. These products cost $21 each and on import are subject to an excise duty of $4 per item and VAT at 20%. If the entity imports 100 items, how much do they pay the tax authorities? An entity purchases raw materials for $1,100 and pays VAT at standard rate on them. The materials are used to produce two products X and Y. The entity sells 200 units of product X at $5 each and 400 units of product Y at $4 each. Product X is zero rated for VAT purposes

and product Y is standard rated. Assume that there are no other transactions affecting the VAT payments and that the standard rate of VAT is 20%. At the end of the period the entity pays the net amount of VAT due to the tax authorities. How much VAT was paid: If a product is exempt for VAT purposes it means that an entity: