Tax

    VAT (Value-Added Tax)

    A consumption tax used outside the US, levied at each stage of production.

    Definition

    Common in EU, UK, Canada (GST/HST), Australia (GST). Sellers collect VAT on sales and reclaim VAT paid on business inputs. US sales tax is single-stage; VAT is multi-stage.

    Related terms

    Sales tax

    A tax on the sale of goods (and sometimes services) collected from the customer at checkout.

    GST (Goods and Services Tax)

    A broad consumption tax used in Canada, Australia, India, and other countries.