Tax
Net tax rate method: when switching pays off
For smaller companies, settling VAT with the net tax rate method can save a lot of work. A simple calculation shows whether it also pays off financially.
With the net tax rate method you settle the tax as a flat rate on turnover without claiming input tax item by item. That saves bookkeeping — but costs money if you invest heavily.
Rule of thumb
High investment and many bought-in services favour the effective method; a lean business with few purchases favours the net tax rate.
Mind the deadlines
Changing method is subject to deadlines. Plan it together with next year’s budget.
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