Country X has a consumption-style, destination principle 10 percent European-style, credit-invoice method VAT levied on the tax-exclusive

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Country X has a consumption-style, destination principle 10 percent European-style, credit-invoice method VAT levied on the tax-exclusive sales price of taxable goods and services and on imports. It provides a “small trader” exemption for businesses that have total taxable receipts below $50,000 annually. In the current period, a distributor imports goods for $30,000 (before VAT), and pays $2,050 for services from a small trader exempt from VAT. This price includes $50 that the small trader paid in VAT on its purchases. The distributor sells to retailers all of its goods for $65,000 (before VAT). These retailers do not make any other purchases, and they sell these goods for $100,000 (before VAT). How much VAT does the government collect from the above transactions?

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