Vat: meaning, definitions and examples

tax

A tax levied on the sale of goods and services, ultimately paid by the consumer.

sales tax, value-added tax.

Which Synonym Should You Choose?

Word	Description / Examples
vat	An acronym for value-added tax, used in the same contexts as 'value-added tax' and often in formal or business communications. The invoice includes VAT at the standard rate Small businesses must register for VAT if their turnover exceeds a certain threshold
value-added tax	A type of tax that is applied incrementally at each stage of production or distribution of goods and services. Common in many European countries. The value-added tax on this product is 20% Companies can often reclaim the value-added tax that they have paid on business expenses
sales tax	A tax on sales or on the receipts from sales, typically added to the price of goods and services at the point of sale. Common in many countries. The price of the shirt was $20, but with sales tax, it came to $21 50 Different states have different sales tax rates

Examples of usage

• The price of the product includes VAT.

• VAT is added at the checkout.

abbreviation

Value Added Tax.

Examples of usage

• The receipt shows the total amount including VAT.

• VAT is calculated at 20%.

Europe

A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.

Examples of usage

• In many European countries, VAT rates vary for different products.

• Businesses need to register for VAT to collect and pay it to the government.