value added tax (VAT)
Definition
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.
value added tax (VAT) is in the Accounting & Auditing and Economics, Politics, & Society subjects.
value added tax (VAT) appears in the definitions of the following terms: sales tax, ad valorem tax, value added, business tax and indirect tax
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