Tax adjustments

What is tax?

Taxes are mandatory payments that the government collects from citizens or organizations to generate income to finance public services. Taxes are usually collected on various activities such as income, consumption, purchase of goods and services. Tax revenues are used to finance public services, realize infrastructure projects, provide public services such as health and education, and maintain the functioning of the state.

Taxes can shape economic policies as well as the state's revenue generation. For example, tax policies can reduce economic inequality, promote employment or provide support to certain industries.

Tax types can be varied. These include different types such as income tax, corporate tax, value added tax (VAT), fees, property tax, motor vehicle tax. Each country's tax system may be different, and details such as tax rates, exemptions, and exclusions may vary from country to country.

Is VAT added when exporting?

VAT (Value Added Tax) is usually not added when exporting. Export refers to the sale of goods or services from one country to another, and such sales are generally not subject to local VAT. Not adding VAT on exports is done to support the competitive sale of products or services in international markets.

Many countries have adopted VAT exemption or zero-rate VAT on exports to encourage exports and increase international competitiveness. This enables exporting businesses to market products or services abroad at a more competitive price.

However, export procedures can be complex and differ from country to country. It is recommended that you carefully review local tax laws and export regulations, or seek assistance from a local tax advisor, for precise information on VAT enforcement or exemption on exports.

What are the types of VAT?

VAT (Value Added Tax) is a type of consumption tax added during the production and distribution stages of a good or service. VAT is generally passed on to the end consumer and the amount of tax increases at each stage of the product or service. Different types or rates of VAT may vary from country to country. Here are some of the common types of VAT:

Standard VAT: This is the standard VAT rate applicable in most countries. This rate is generally applied to all general goods and services. The standard VAT rate is determined by the country's economic and tax policies.

Reduced VAT: Some countries charge a lower VAT rate on essential consumer goods or certain services. For example, a reduced VAT rate can be used for basic necessities such as food, medicines, books.

Zero Rate VAT: Some countries set the VAT rate to zero for certain transactions, such as exports. This helps exporters to offer competitive prices in the international market.

Exemption: Some countries define full VAT exemption for certain goods or services. In this case, VAT is not charged on the goods or services.

Special VAT Rates: Some countries may set different VAT rates for certain industries or special circumstances. Special VAT rates may apply for sectors such as restaurants and accommodation services.

Digital Services Tax: Some countries may impose a special digital services tax or equivalent on digital goods and services.

Depending on the tax system and policies of each country, the types and rates of VAT may differ. Businesses and consumers can seek help from local tax authorities or expert tax advisers to understand and properly manage local tax legislation.

How to set VAT on the products I added on Cosmedrome?

When you add a product in Cosmedrome, there is a "Tax rule" section in the "Pricing" tab. In this section, the tax rules of the country you are selling are defined by default based on the VAT types and rates of that country. You can adjust the VAT by choosing the one that suits you best. For example;

PL Standard Rate (23%): This VAT rate is the standard VAT rate for Poland. When a seller selling in Poland chooses this VAT rate, it adds 23% VAT to the products for its own country and users purchasing the product from 22 different countries. However, since Turkey is not included in this list, VAT is not added when a user purchases a product from Turkey.

TR Standard Rate (20%): This VAT rate is the standard VAT rate for Turkey. When a seller selling in Turkey chooses this VAT rate, VAT is applied only to sales made to his own country, in accordance with VAT practices in Turkey. In other words, VAT is added to sales to Turkey, but VAT is not applied to sales to other countries.

By selecting the relevant VAT rate while selling the product, you can ensure that the VAT rates are applied automatically during the sale.