> So while costs are added on to the customer, it would result in a price raise resulting in lessening their competitive advantage. Every business that sells g

> So while costs are added on to the customer, it would result in a price raise resulting in lessening their competitive advantage. Every business that sells goods/services in VAT country collects VAT and transfers it to tax authority. There's no any advantage or disadvantage for someone, everyone plays by the same rules. To sum it up, businesses "do not pay" VAT (technically they pay, but then reclaim it at the end of the month). All VAT burden always falls on the end consumer. Wikipedia says, that VAT is similar to sales tax, but since I'm not too familiar with sales tax, can't comment on that similarity. https://en.wikipedia.org/wiki/Value-added_tax https://en.wikipedia.org/wiki/Value-added_tax