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No, they are not the same thing. You pay VAT on the value added at each part of the process. So a retailer pays VAT to their wholesaler, unlike American state s
by gok 8y ago
No, they are not the same thing. You pay VAT on the value added at each part of the process. So a retailer pays VAT to their wholesaler, unlike American state sales tax systems.
- koyote 8y agoWhich is why I said 'pretty much'. In this discussion they can be regarded as the same thing.
- icebraining 8y agoYeah, but the retailer then deducts that VAT from the amount charged to the customer, so in the end it's the same, only the final customer pays VAT.
- steve_gh 8y agoNo. VAT is across the supply chain, provided they are all VAT registered. So as a business you only pay The net VAT between sales and purchases.
- gok 8y agoEr, that's what I said/meant? This is unlike US sales tax, which is only applied at the end, and on the entire value of the sale, not the value added. Edit: Ok I see, the "you" I had in my post was confusing. VAT is charged on the value added at each point of the chain, again unlike sales/use tax.