What is VAT?

The final customer bears the tax, but the shop is the collector. The shop's tax bill is the VAT collected on sales (output tax) minus the VAT paid on stock and supplies (input tax). That is why tax collected is never the shop's income.

Example with a generic 10 percent rate. In a month a shop sells $5,000 of taxable goods and collects $500. It bought $3,000 of stock and paid $300 of VAT. It remits $500 - $300 = $200.

Rates and thresholds differ by country and change, so check with the tax authority or an accountant before relying on any figure here.

• Trinidad and Tobago: 12.5 percent, with registration required at TT$600,000 of supplies in twelve months, according to the Inland Revenue Division.
• Guyana: a standard rate of 14 percent, per the Guyana Revenue Authority, with mandatory registration at G$15,000,000 of taxable activity, per its registration guidance.
• Barbados: 17.5 percent for standard supplies, 0 percent for zero-rated items, per the Barbados Revenue Authority.

Jamaica's equivalent is GCT.

• Spending the tax. Keep it aside until the return is filed.
• Losing purchase invoices. Without a valid tax invoice you may not be able to claim the input tax.
• Mixing up zero-rated and exempt. See zero-rated.
• Mispricing inclusive shelf prices. Divide by 1 plus the rate to find the tax portion.

Shopkeepa lets a shop set its currency and sales tax (GCT or VAT) and mark each product as taxable. It does not file returns. Shopkeepa is not yet available.