A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.
The value added to a product by or with a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs. A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.
Other articles related to "added, value added tax, value added, tax":
... cases of least squares fitting, the model coefficients for previously added terms change depending on what was successively added ... included terms do not change as additional terms are added ...
... The standard rate of value added tax is 25.5%, with a reduced rate of 7% for certain products ...
... and the unit labor cost is the unit value added ... Summing value added per unit over all units sold is total value added ... Total value added is equivalent to Revenue less Outside Purchases (of materials and services) ...
... The "value added tax" has been criticized as the burden of it falls on personal end-consumers of products ... Some critics consider it to be a regressive tax, meaning that the poor pay more, as a percentage of their income, than the rich ... levels to income is an arbitrary standard, and that the value added tax is in fact a proportional tax in that people with higher income pay more in ...
... The value added tax (VAT Mehrwertsteuer / Taxe sur la valeur ajoutée / Tassa sul valore aggiunto) is one of the Confederation's principal sources of funding ... those of medical, educational and cultural services, are tax-exempt as are goods delivered and services provided abroad ... the goods is liable for the payment of the VAT, but the tax is usually passed on to the customer as part of the price ...
Famous quotes containing the words tax and/or added:
“...many tax collectors and sinners were also sitting with Jesus.”
—Bible: New Testament, Mark 2:15.
“This noble ensample to his sheep he yaf,
That first he wroghte, and afterward he taughte.
Out of the gospel he tho wordes caughte,
And this figure he added eek therto,
That if gold ruste, what shal iren do?”
—Geoffrey Chaucer (1340?1400)