Many individuals begin to consider using cut Christmas trees to decorate their houses as the holiday season draws near. But do these trees have Value Added Tax (VAT) attached to them? Yes, VAT at the regular rate of 20% is applicable to cut Christmas trees.
At every level of production and distribution, commodities and services are subject to the consumption tax known as VAT. Christmas trees that have already been cut down are products and as such are taxed. This means that you will be charged VAT on the cost of the tree if you buy a cut Christmas tree from a merchant.
Are Christmas cards therefore subject to VAT? Yes is the second response. As a product, Christmas cards are subject to VAT at the regular rate of 20%. This means that you will be charged VAT on the cost of the Christmas cards if you buy them from a merchant.
The VAT treatment of fertilizers varies based on their intended usage. The fertilizer is zero-rated for VAT if it is utilized for agricultural purposes. This indicates that there is no VAT added to the cost of the fertilizer. However, the fertilizer is liable to VAT at the regular rate of 20% if it is used for gardening or landscaping.
Similar to how plants and compost receive various VAT treatments based on their intended use. The plants are zero-rated for VAT if they are utilized to produce food. However, the plants are liable to VAT at the regular rate of 20% if they are utilized for ornamental reasons. Additionally, compost is subject to VAT at the regular rate of 20%.
In conclusion, the regular rate of 20% VAT is applied to cut Christmas trees, Christmas cards, and decorative plants. However, gardening or landscaping fertilizers and ornamental plants are liable to VAT, whereas agricultural fertilizers and plants used for food production are zero-rated for VAT. When buying these things throughout the holidays and beyond, it’s crucial to keep these VAT treatments in mind.
2021 will see a 5% income tax rate in Massachusetts. But this has nothing to do with the article’s main question, which is whether or not cut Christmas trees are liable to VAT.