Key Aspects of Spanish VAT
VAT Liability
VAT liability answers the question: Who is liable for the tax?
- As a general rule, the supplier making the delivery or billing for goods delivered is liable for the tax. The initial taxpayer bears the impact; the final consumer is never the taxable person. This rule applies to established suppliers.
- As a special rule for deliveries made by a person not established on Spanish territory, the taxpayer is the recipient business. This is known as the reverse charge mechanism, contrasting with
Market Structures and Labor Economics Explained
Market Structures
Competition: A rivalry between several companies that sell the same kind of goods or services in that market.
Perfect Competition
Perfect competition is a type of market in which there are many small firms that produce a single, undifferentiated product, so none of the producers can influence the price at which they sell their product.
Market Balance: Short & Long Term
Short Term: Market conditions in the short run determine the behavior of all producers and consumers of a product.
Read MoreInventory Control and Turnover
Stock Structure and Size
The total stock should consist of:
- Presentation Stock: Stock items on display in the aisle.
- Reserve Stock (Normal Cycle): Stock unlocked to meet normal customer demand between the receipt of two orders.
- Safety Stock: A protection stock that seeks to prevent the shelf from being empty because of unexpected changes in supplier supply and/or customer demand.
Inventory Management Costs
1. Acquisition Cost
The purchase price on the invoice plus all expenses paid by the buyer.
2. Storage
Read MoreUnderstanding the Circular Flow of Income
Meaning of Circular Flow of Income
The circular flow of money refers to the process whereby money payments and receipts of an economy flow in a circular manner continuously over a period of time. The various components of money payments and receipts are saving, investment, taxation, loans, government purchases, exports, imports, etc. These are shown in a diagram in the form of current and cross-current in such a manner that the total money payments equal the total money receipts in the economy.
Circular
Read MoreBritish East India Company Monopoly and Core Economic Principles
British East India Company Monopoly
The British East India Company (EIC) was granted a monopoly on trade in the Indian subcontinent by the British Crown, which gave the company exclusive rights to trade in the region. This monopoly was a crucial factor in the EIC’s rise to power and its eventual establishment of British rule in India.
Establishment
The EIC’s monopoly was established through a series of royal charters and grants, which gave the company exclusive rights to trade in the Indian Ocean and
Read MoreSpain’s Economic Transformation: 1959-2007 Cycles
Spain’s Economy: 1959-1974 Stabilization & Growth
1959-1967: Stabilization Plan and Initial Growth
- Starting with a stabilization plan, this period saw growth exacerbate the imbalance where Demand (D) exceeded Supply (S).
- Exports experienced strong expansion thanks to the new Peseta (PTA) exchange rate and accelerated growth in European economies.
- Rising prices (inflation) and the external deficit increased.
- In 1967, the PTA had to be devalued. Measures included freezing salaries and reducing rates.