Consumption Tax

Overview:

Introduction

A consumption tax is a charge made by a federal agency when any (or the majority of) goods or services are purchased. A taxing system in which people are charged according to how much they spend rather than how much they contribute to the economy is known as a consumption tax (i.e. income tax).

The sale of products and services is subject to a consumption tax in virtually every nation in the world. Sales taxes, tariffs, excise taxes, and other taxes on consumed products and services are examples of consumption taxes. Customers that pay a higher retail price for the good or service are responsible for these taxes.

The consumption tax, which is gathered by the seller and sent to the relevant federal or local authorities, is included in the final price. Consumption taxes are typically assessed at varying rates for various goods, mainly in accordance with judgments of whether a commodity is seen of as a luxury good or a basic requirement.

Course Objectives:

At the end of this course the participants will learn about:

• Make a consumption tax calculation.
• Describe the purpose of an invoice and the information that it contains.
• Learn to write and interpret credit notes.
• Describe a statement's major points and intended audience.
• Practice cross-teaching exercises.
• Describe the procedure and paperwork involved in the purchase.
• Be familiar with how to write and understand a purchase invoice
• Reconcile your creditors using an example.
• Analyze case studies with diverse regional tax regulations.

Targeted Audience

• Accountants, tax consultants
• experts in general taxation
• Tax experts working for advising firms
• novices in the trade and commercial industries
• government employees
• Internal tax managers or directors
• tax enforcement agencies

Course Outline:

Unit1: Introduction 

• Sales tax definition
• Fundamentals of sales tax
• How to Calculate Sales Tax
• Sales tax case study

Unit2: Understanding consumption taxes 

• Valuation Added Tax (VAT)
• Excise Tax and Goods and Services Tax (GST)
• Import taxes
• Tax on Retail Sales
• Income Tax vs. Consumption Tax
• Straight Tax
• Describe the Cascade Tax.
• Adaptive Tax
• benefits and drawbacks of consumption tax

Unit3: SALES

• Sales invoices
• Preparing invoices with and without trade discount
• Sales invoices with settlement discount
• Sales Credit Notes
• Case Study- Prepare invoices and credits for Jakes Palace
• Case Study- understanding discount
• Statements and the AR department
• Case Study- Preparing statements
• Prime books overview
• Sales Day Books
• Case Study- Enter data to sales and returns day books
• Sales Conclusion

Unit4: PURCHASES

• The Purchasing process and checking invoices
• Case Study – Check a purchase invoice
• Coding invoices
• Coding invoices samples
• Case Study – Coding invoices
• Transferring invoices and credits to the Purchase Daybooks
• Case Study – Enter data to the purchase and purchase returns daybook
• Creditor reconciliation
• Case Study – Creditor Reconciliation

Unit5: HOW TO CALCULATE SALES TAX AND HOW TO COLLECT IT

• Think about if you should include taxes in your prices on your website.
• Apply taxes at checkout
• Calculate and collect in the US
• Calculate and collect in the EU
• Calculate and collect in other countries