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How do you calculate value add if you’re a factory that imports parts from another state and sells an assembled final product?
by grandmczeb 6y ago
How do you calculate value add if you’re a factory that imports parts from another state and sells an assembled final product?
- AnthonyMouse 6y agoBeing produced out of state doesn't get you out of it. If you import something from out of state, the act of importing causes VAT to be due on its value. If you then add value in the factory, you owe that too. The total VAT is always equal to the sale price. (If you like to promote exports you then give a refund for products not sold in the state.)
- grandmczeb 6y agoThat gives a heavy incentive to lie about where it was produced. That’s fine when imports are tracked across a border, but not in the system we have in the US.