Hi all, I am currently modeling the acquisition of a country club and while doing the DCF I have run into what I think is a very stupid question, but here it is: The country club does not charge VAT to it's customers, but it has to pay VAT on its services. What happens to the difference between VAT charged (zero) and VAT paid? Is that an asset I can claim to the tax authorities? How do I account that VAT expense? Is it just an increase in COGS?
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In all likelihood, VAT is probably included as part of the amount charged to customers. Its just not separately broken down in the bill. Have they specifically mentioned that they charge Zero VAT? If there is no way to claim the tax paid, then it would just be an increase in costs.
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