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with VAT, it should not be a cost for you, is it? (I mean, it should be a cost just for the "value added")

• ajsnigrutin 7y ago
  You have to charge your customers the VAT, so if you're employed as a plumber, you actually have to charge the customers directly everything including the VAT. It's not the you who pays it directly, but you have to earn your company the amount including the vat.
• denton-scratch 7y ago
  VAT is a sales tax (or purchase tax). The "value added" bit is a neat scheme allowing tax authorities to collect efficiently - it's nothing to do with value, it's about price; the government taxes transactions (the vendor pays). Like all sales taxes, it's regressive: poor people spend more of their income on purchases than rich people, so they spend more on sales tax. Income tax and wealth tax are much more progressive, but they're also much harder to assess and collect.
  • Discombulator 7y ago
    Just a small correction: as a business, you subtract the VAT on your suppliers’ invoices from the VAT invoiced to your customers. Effectively you remit the taxes only on the added value of your business, hence the name. This makes it also harder to avoid taxes. But in the end, the end user pays the tax on the full price, as you say.