Value Added Tax

Summary of Value Added Tax

A tax imposed upon the value added to a product at each stage of the production process. The tax is applicable to all goods, from primary to consumer products. Each processor in the chain of production pays the tax in the purchase price of the goods, applying the tax paid by prior handlers to its own tax obligation. Only the consumer pays the full tax. The tax is applicable to imported merchandise (usually on top of any duties imposed) but is routinely rebated on goods that are exported.

The VAT is applied by members of the European Economic Community and a few other countries. A modified form of VAT, called the single business tax, is employed in Michigan.

(Main Author: William J. Miller)

Other Popular Tax Definitions in the World Legal Encyclopedia

• Adjusted Gross Income (sometimes, including Value Added Tax)
• Ad Valorem Tax (sometimes, including Value Added Tax)
• Alternative Minimum Tax (sometimes, including Value Added Tax)
• Big Four (audit firms) (sometimes, including Value Added Tax)
• Black Market (sometimes, including Value Added Tax)
• Capital Gain (sometimes, including Value Added Tax)
• Capital Gains Tax (sometimes, including Value Added Tax)
• Carbon Tax (sometimes, including Value Added Tax)
• Church Tax (sometimes, including Value Added Tax)
• Corporate Tax (sometimes, including Value Added Tax)
• Corporate Tax (sometimes, including Value Added Tax)
• Customs (sometimes, including Value Added Tax)
• Deferred Tax (sometimes, including Value Added Tax)
• Depreciation (sometimes, including Value Added Tax)
• Dividend (sometimes, including Value Added Tax)
• Employer Identification Number (sometimes, including Value Added Tax)
• Estate Tax (sometimes, including Value Added Tax)
• Excise (sometimes, including Value Added Tax)
• Fiscal Policy (sometimes, including Value Added Tax)
• Fiscal Year (sometimes, including Value Added Tax)
• Flexible Spending Account (sometimes, including Value Added Tax)
• Government Spending (sometimes, including Value Added Tax)
• Gross Income (sometimes, including Value Added Tax)
• Health Savings Account (sometimes, including Value Added Tax)
• History of Taxation (sometimes, including Value Added Tax)
• Income Tax (sometimes, including Value Added Tax)
• Income tax (sometimes, including Value Added Tax)
• Income Tax (sometimes, including Value Added Tax)
• Income Tax Law (sometimes, including Value Added Tax)
• Indirect Tax (sometimes, including Value Added Tax)
• Inheritance Tax (sometimes, including Value Added Tax)
• Offshore Bank (sometimes, including Value Added Tax)
• Payroll Tax (sometimes, including Value Added Tax)
• Progressive Tax (sometimes, including Value Added Tax)
• Property Tax (sometimes, including Value Added Tax)
• Public Finance (sometimes, including Value Added Tax)
• Rate Schedule (Federal Income Tax) (sometimes, including Value Added Tax)
• Real Estate Investment Trust (sometimes, including Value Added Tax)
• Regressive Tax (sometimes, including Value Added Tax)
• Sales tax (sometimes, including Value Added Tax)
• Sales Tax (sometimes, including Value Added Tax)
• Subsidy (sometimes, including Value Added Tax)
• Tariff (sometimes, including Value Added Tax)
• Tax (sometimes, including Value Added Tax)
• Taxation (sometimes, including Value Added Tax)
• Taxation and Customs Union (sometimes, including Value Added Tax)
• Taxation Definition (sometimes, including Value Added Tax)
• Taxation (in different countries) (sometimes, including Value Added Tax)
• Taxation in the European Union (sometimes, including Value Added Tax)
• Taxation Office (sometimes, including Value Added Tax)
• Taxation Principles (sometimes, including Value Added Tax)
• Taxation without representation (sometimes, including Value Added Tax)
• Tax Bracket (sometimes, including Value Added Tax)
• Tax Code (sometimes, including Value Added Tax)
• Tax Code (sometimes, including Value Added Tax)
• Tax Deducted at Source (sometimes, including Value Added Tax)
• Tax Evasion (sometimes, including Value Added Tax)
• Tax exemption (sometimes, including Value Added Tax)
• Tax Forms (sometimes, including Value Added Tax)
• Tax Haven (sometimes, including Value Added Tax)
• Tax Law (sometimes, including Value Added Tax)
• Tax Law Careers (sometimes, including Value Added Tax)
• Tax Law Jobs (sometimes, including Value Added Tax)
• Tax Rate (sometimes, including Value Added Tax)
• Transfer Pricing (sometimes, including Value Added Tax)
• Types of Taxation (sometimes, including Value Added Tax)
• Types of Taxes (sometimes, including Value Added Tax)
• Value Added Tax (sometimes, including Value Added Tax)
• VAT Identification Number (sometimes, including Value Added Tax)
• Withholding Tax (sometimes, including Value Added Tax)

Value Added Tax (VAT) and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Value Added Tax (VAT): An indirect tax, assessed on increments in the value of a product from the raw-material stage through the production process to final sale. At each stage, the tax is levied on the amount by which inputs purchased from the preceding stage have been augmented in value. The final sale price will incorporate all of the V A T payments made along the production chain.

Value added tax and the European Union

Resources

See Also

• National Income
• National Accounts
• Expenditure
• Gross National Income
• Net National Income

Resources

See Also

• VAT