Value-added Tax

Value-added Tax means:
a tax imposed at each step in the production process, levied upon the difference between the purchase cost of the asset to the taxpayer and the price at which it may be sold-the value added to it. Specific type of turnover tax levied at each stage in the production and distribution process. The VAT is a primary source of tax revenue in certain European countries but has not been extensively used in the United States, although the Clinton administration and some members of Congress may be considering introducing the VAT into the U.S. tax system.

See Value Added Tax and Value Added Tax in the World.

U.S. and other Developed Countries International Tax Meaning

Although VAT ultimately bears on individual consumption of goods or services, liability for VAT is on the supplier of goods or services. VAT normally utilizes a system of tax credits to place the ultimate and real burden of the tax on the final consumer and to relieve the intermediaries of any final tax cost.

See Indirect Tax in the U.S. Reference and Indirect Tax in the International reference.

International Tax Law.