sisendkäibemaksu

Sisendkäibemaks refers to the value-added tax (VAT) paid by a business on its purchases of goods and services. This tax is typically deductible from the output VAT that the business collects from its customers. In essence, it represents the VAT incurred by a business in its economic activities that it can reclaim from the tax authorities.

For a business to be able to deduct input VAT, the purchased goods or services must be used for its taxable supplies, meaning for the purpose of generating revenue that is subject to VAT. If goods or services are used for exempt supplies or for activities outside the scope of VAT, the input VAT associated with those purchases is generally not deductible. The principle behind this mechanism is that VAT should ultimately be borne by the final consumer, not by businesses in the supply chain.

Businesses must maintain proper records and invoices to substantiate their claims for input VAT deductions. These invoices typically need to show the VAT amount separately and the details of the supplier and the buyer. If a business fails to meet these requirements or if the purchases are not eligible for deduction, the input VAT cannot be reclaimed. This system ensures that businesses act as tax collectors for the government, remitting the net difference between the output VAT they collect and the input VAT they have paid.