VAT / GST is a taxation system where taxes are pre-factored into the final prices of items. So instead of going to the store, picking out items and then adding sales tax at the register, the price you see is the final price you pay.
VAT is rarely seen within the United States, so is not recommended for US users.
How Shopventory handles VAT
If you price an item at $6.00 in Square and you have a 20% VAT, you are still selling it for $6.00, the price of the item isn't changed for your Customer.
When you sell the item, the tax is going to be $1.00 and the revenue for the item is going to be $5.00. If your cost for this item is $2.00, you will have a profit of $3.00.
- You paid $2.00 for the item.
- The list price is $5 + 20% tax ($6.00)
- Tax is already factored into the list price your Customer pays.
NOTE: Shopventory only calculates your VAT. Any VAT that has come down the line from your suppliers for rebates is NOT factored into Shopventory's calculations.