I’m italian vat registered, i buy products without vat, i have not vat on amazon fees and fba cost, and i sell with local vat (in italy 22%, in germany 20% etc…).
In settings i have set vat exclusion as in the screen, and i think that in COG i must insert the cost of the products without vat (and i buy it without vat) then must i set 0 vat rate?
Thanks
Yes, you’ve got the right idea! In your COG (Cost of Goods) settings, input the cost of your products without VAT since you’re buying them without VAT. Then, for the VAT rate, you can set it to 0% since you’re not paying VAT on your purchases. This should help you accurately calculate your profits and taxes based on the local VAT rates when you sell your products in different countries.
You must always include vat on all costs. Even if you did not pay vat, you must add it as if you did to ensure P&L is accurate.
The cog code on your cog does not mean your cogs are without vat. This must be set to the vat rate of the item.
Obviously if it is a zero rated vat item then the cog would also not include vat.
So, if you have item that is 5% vat but you paid no vat on purchase, you must still add 5% to the cost as if vat was paid.
In STK you need to add the price with VAT included know you did not pay VAT but for accurate calculation you need to add the COG with VAT included.
For the VAT rate you need to add the standard VAT rate of the country (unless is reduced VAT or 0 VAT).
Hope it makes sense.
I know @ePrinter_Supplies advised that COGS should include VAT although you don’t pay VAT on purchases, because you’ll charge VAT upon sale. So cost and income should have the same settings (including or not including VAT), otherwise your profit will be wrong.
