VAT (Value Added Tax)

A consumption tax levied at each stage of the supply chain where value is added. Common worldwide, calculated either exclusive (added to price) or inclusive (extracted from price).

Unlike a single-point sales tax, VAT is levied incrementally as goods move through production, with businesses reclaiming the tax they paid on inputs. The end consumer ultimately bears the full rate, whether it is shown added to the price or already baked in.