I'm an importer in the process of registering for VAT.
Had a discussion with a friend of mine that is becoming a CA.
He holds that an importer is able to earn HIGHER profits by being VAT registered (as opposed to not being registered for VAT).
My opinion is that importing has the same VAT implications as buying stock from a local supplier, which means that VAT causes you to earn a LOWER profit (as opposed to not being registered for VAT).
We are assuming that the cost of the good is R100, and it is sold for R115.
Please could someone with VAT knowledge check the following file and let me know if it is correct?
The left hand side is the comparison of non-VAT/VAT registered seller who is supplied by a local supplier (and in my own opinion, by an international supplier too).
The right hand side is the same comparison when supplied by an international supplier (according to my friend's logic).
Thanks a ton for the help!