With VAT you pay the difference: You purchase the item for $11.50 Vat on item is $1.50, that $1.50 is your VAT INPUT You sell the item for $23.50 Vat on item is $3.00, that $3.00 is your VAT OUTPUT What you are liable to pay considering your VAT OUTPUT exceeds your VAT INPUT will be $1.50 hope this ...