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business set up taxing goods?

  • 25-06-2008 4:08pm
    #1
    j2u
    Closed Accounts Posts: 314 ✭✭


    HI im setting up an online store selling various items.my question is if i buy something for say €60 and sell at retail for €100 then that would be a total of €40 profit without tax.so even though i dont believe im liable for tax as im inder the €70,000 threshold to be legally obligated to pay tax what is the vat applied to the purchase price? or the profit i make.i understand that i include tax in the retail price but is that the current rate of vat of the wholesale price plus whatever profit i wish to make the total retail price?
    so i think the current rate of tax is at 21%.so 60 x 0.21= €12.60
    so not including tax i make 40 euro profit
    and if i charge tax to the item i am selling i would make €27.40.Am i right about that?


Comments

  • #2
    pigeonbutler
    Registered Users, Registered Users 2 Posts: 666 ✭✭✭pigeonbutler


    You don't seem to have a clear understanding of what's VAT and what's Income Tax.

    If you're under the VAT registration threshold you won't need to charge VAT on your sales. Also if you did have to charge VAT, there are different rates but 21% is the standard rate.

    You will be liable to income tax (@ 20% and 41%) on the profits of the business. That means the gross profit on sales less any expenses of the business.


  • #3
    Baby4
    Closed Accounts Posts: 1,407 ✭✭✭Baby4


    This post has been deleted.


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