What is the difference between gst and sales tax

Sales tax automation software can help you understand and determine if you have met the nexus threshold. For both sales tax and VAT , the seller is responsible for collecting the tax and remitting to the appropriate tax authority, although there are cases where the buyer must recognize the tax instead.

Sales tax vs. VAT overview Sales tax is collected by the retailer when the final sale in the supply chain is reached. What triggers the tax administration requirement?

Sales tax obligations are triggered by: Nexus — e. VAT collection is required under the following circumstances: Permanent establishment — Existence of a facility, bookkeeping facilities, or ability to enter contracts Registration threshold — Taxpayers with business activities that exceed the monetary threshold in a tax jurisdiction Sometimes a specific activity triggers a VAT registration obligation e.

Invoicing Sales tax : The seller should separately state sales tax. Who pays sales tax and VAT? Sales tax : Only the final consumer pays. Taxability of purchases by business Sales tax : Resellers issue a tax exemption certificate to the vendor and do not pay tax on purchases of items to be resold. Audit risks for sales tax and VAT Sales tax : Vendors that sell to resellers must keep valid exemption certificates on file or risk an audit assessment turning exempt sales into taxable sales.

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