Definition of Value-added Tax (VAT) | Consumption or Excise Tax

Accounting Definitions

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Value-Added Tax (VAT) Definition

Value-added tax (VAT) is a consumption or excise tax that is imposed at each stage of production (as value is added to the product).

VAT Expanded Definition
For decades, US tax reform has recommended restructuring our tax system to include a VAT. Many foreign countries use VAT; sometimes replacing or decreasing the amount of income tax a business would have paid.

Last Updated By

Jenna Hutkowski | Apr 18, 2023

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