What is VAT ?

Question

What is Value Added Tax

Answer 1

A consumption tax which is levied at each stage of production based on the value added to the product at that stage.

Answer 2

Value added tax (VAT) is a type of sales tax. In some countries, including Australia, Canada, New Zealand, and Singapore, this tax is known as "goods and services tax" or GST; and in Japan it is known as "consumption tax". VAT is an indirect tax, in that the tax is collected from someone other than the person who actually bears the cost of the tax (namely the seller rather than the consumer). As VAT is intended as a tax on consumption, exports (which are, by definition, consumed abroad) are usually not subject to VAT or VAT is refunded.

VAT was invented by a French economist in 1954. Maurice Lauré, joint director of the French tax authority, the Direction générale des impôts, as taxe sur la valeur ajoutée (TVA in French) was first to introduce VAT with effect from 10 April 1954 for large businesses, and extended over time to all business sectors. In France, it is the most important source of state finance, accounting for approximately 45% of state revenues.

Personal end-consumers of products, consumers and services cannot recover VAT on purchases, but businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling. It has been criticized on the grounds that it is a regressive tax

Answer 3

Value added tax (VAT) is a type of sales tax. In some countries, including Australia, Canada, New Zealand, and Singapore, this tax is known as "goods and services tax" or GST; and in Japan it is known as "consumption tax". VAT is an indirect tax, in that the tax is collected from someone other than the person who actually bears the cost of the tax (namely the seller rather than the consumer). As VAT is intended as a tax on consumption, exports (which are, by definition, consumed abroad) are usually not subject to VAT or VAT is refunded.

VAT was invented by a French economist in 1954. Maurice Lauré, joint director of the French tax authority, the Direction générale des impôts, as taxe sur la valeur ajoutée (TVA in French) was first to introduce VAT with effect from 10 April 1954 for large businesses, and extended over time to all business sectors. In France, it is the most important source of state finance, accounting for approximately 45% of state revenues.

Personal end-consumers of products, consumers and services cannot recover VAT on purchases, but businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling. It has been criticized on the grounds that it is a regressive tax

Answer 4

Value Added Tax. It's a tax added to items sold in the United Kingdom.

Answer 5

VAT is a tax charged on value added. Computation of VAT varies by country, but generally, your VAT liability is your domestic sales (exports are excluded) times the VAT rate minus any VAT that you already paid because it was included into your suppliers' prices.

Answer 6

V=Value A=Added T=Tax This is common in Europe it is a sales tax of sort but it also is a form of income tax the retailer must pay a portion to the goverment this funds the goverment instead of the crappy USA tax system ! Hope this helps

Answer 7

VAT= Value added tax

Log on for global perspective of VAT : http://en.wikipedia.org/wiki/VAT

Log on for VAT in an Inidan perspective http://finance.indiamart.com/taxation/vat_in_india.html

Answer 8

I don't know maybe taxed more because of it's high value.