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A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared with, a sales tax.
A business is generally able to recover input VAT to the extent that the input VAT is attributable to (that is, used to make) its taxable outputs. Input VAT is recovered by setting it against the output VAT for which the business is required to account to the government, or, if there is an excess, by claiming a repayment from the government.
The usual operation of VAT is as follows: a business that buys and sells goods charges VAT to those to whom it sells ('output tax'), and is charged VAT by those from whom it purchases ('input tax'). It can reclaim (subject to various rules) the VAT it pays, and so passes to the government the net VAT it collects (being output tax less input tax).
All Countries; List of countries by tax rates; Tax revenue to GDP ratio; Tax rates in Europe; Individual Countries; Albania; Algeria; Argentina; Armenia; Australia
Value-added tax (VAT) is a tax on sales. It is assessed incrementally on a product or service at each stage of production and is intended to tax the value that is added by that production stage, as outlined above by unit value added.
input vat - output vat sales of portfolio items and capital gains taxes Sales Returns and Allowances and Sales Discounts are contra-revenue accounts. In a survey of nearly 200 senior marketing managers, 70 percent responded that they found the "sales total" metric very useful. [5]
VAT is an indirect tax because the tax is paid to the government by the seller (the business) rather than the person who ultimately bears the economic burden of the tax (the consumer). [4] Opponents of VAT claim it is a regressive tax because the poorest people spend a higher proportion of their disposable income on VAT than the richest people. [5]
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