What is VAT (Value Added Tax)?

VAT

Is a kind of consumption tax that is added to the final price of the product as added additional value to the product. Value added tax as a percentage of the proposed price of the seller.

VAT is a tax on consumption, where usually paid by the user or the consumer who buys the product, while the supply of the value of the tax by the seller.

Tax paid by the buyer is the difference between the selling price and the cost of the product that has already been paid by taxes

VAT is one of the types of the tax system. For a country it is very good system because it immediately charge sales tax and the amount of tax it increases with each of the transaction.

  Value-added tax is imposed at each add value to a commodity

Value-added tax (VAT) or also goods and services tax (GST) 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 purpose of VAT is to generate tax revenues to the government similar to the corporate income tax or the personal income tax.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

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Value-Added Tax (VAT) is a tax on consumer spending. It is collected by VAT-registered traders on their supplies of goods and services effected within the State, for consideration, to their customers. Generally, each such trader in the chain of supply from manufacturer through to retailer charges VAT on his or her sales and is entitled to deduct from this amount the VAT paid on his or her purchases.

DEFINITION of 'Value-Added Tax - VAT'

A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. Value-added tax (VAT) is most often used in the European Union. The amount of value-added tax that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.

when a television is built by a company in Europe the manufacturer is charged a value-added tax on all of the supplies they purchase for producing the television. Once the television reaches the shelf, the consumer who purchases it must pay the value-added tax that applies to him or her.

The purpose of VAT is to generate tax revenues to the government similar to the corporate income tax or the personal income tax.

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.

VAT is a tax which is levied on "increase in value" of goods and services at each stage of production and circulation. it is charged on the "Added Value" resulting from every transaction or exchange.

VAT is an Value added tax categorized under indirect form of tax. VAT is levied on consumption of goods & services.

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