value added tax (VAT)

Popular Terms
Indirect tax on the domestic consumption of goods and services, except those that are zero-rated (such as food and essential drugs) or are otherwise exempt (such as exports). It is levied at each stage in the chain of production and distribution from raw materials to the final sale based on the value (price) added at each stage. It is not a cost to the producer or the distribution chain members, and whereas its full brunt is borne by the end consumer, it avoids the double taxation (tax on tax) of a direct sales tax. Introduced by the European Economic Community (now the European Union) in the 1970s.

Use 'value added tax (VAT)' in a Sentence

You must factor in the value added tax on any products when you are trying to figure out their worth to your company.
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The people were subject to the value added tax which was to be expected as the state deserves some share of the business transactions.
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If you want to buy a lot of a product you must know what the value added tax will be on it.
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