| | ipedia.com: Value added tax Article (Site not responding. Last check: 2007-10-21) |
 | | VAT is an indirect tax, in that the tax is collected from someone other than the person who actually bears the cost of the tax. |
 | | In this way, the total tax levied at each stage in the economic chain of supply is a fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. |
 | | The difference from conventional sales tax is that VAT is levied on every business as a fraction of the price of each taxable sale they make, but they are in turn reimbursed VAT on their purchases, hence the tax is applied to the value of the goods that has been added. |
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