Output Tax
Category: tax
VAT collected on sales, which must be remitted to the tax authority after deducting input tax.
Output tax is the VAT or GST a business charges on its sales of goods and services. Businesses must report output tax on their VAT returns and pay it to the tax authority, net of any reclaimable input tax. The difference between output tax and input tax determines the VAT payable to or refundable from the government.
Examples
- • A French seller charging 20% VAT on €50,000 of B2C sales generates €10,000 of output tax, against which input VAT on business expenses is credited.
- • Amazon marketplace sellers in the EU have output tax from their product sales but Amazon handles commission VAT separately.
- • If a seller's output tax exceeds their input tax, they owe the difference to the tax authority; if input tax exceeds output tax, they receive a refund.