What is VAT (Value Added Tax)?
VAT (Value Added Tax) is an indirect tax levied on the value added to goods and services during the transaction process.
Characteristics of VAT
- •The final consumer bears the actual tax burden
- •Businesses collect and remit the tax
- •Implemented in over 160 countries worldwide
- •Each country applies different tax rates
How to Calculate VAT
- •Price with VAT = Net Price × (1 + VAT rate)
- •VAT Amount = Net Price × VAT rate
- •Net Price = Price with VAT ÷ (1 + VAT rate)
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