taxVAT

Value Added Tax, commonly referred to as VAT, is a consumption tax placed on a product or service whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed. The VAT system is a broad-based tax. Most goods and services are taxed. VAT is typically levied at a standard rate, although some countries have reduced or zero rates for certain goods and services. Businesses registered for VAT collect the tax from their customers and pay it to the government. They can typically reclaim the VAT they have paid on their own business purchases. This ensures that the tax burden ultimately falls on the final consumer. VAT systems are implemented in over 170 countries worldwide, making it a significant source of government revenue. The specific rates and rules can vary considerably between jurisdictions.