Definitions for "Value-added tax"
A European Community (EC) tax assessed on the increased value of goods as they pass from the raw material stage through the production process to final consumption. The tax on processors or merchants is levied on the amount by which they increase the value of items they purchase. The EC charges a tax equivalent to the value added to imports and rebates value-added taxes on exports.
(VAT) ( taxe sur la valeur ajoutée (TVA)). A tax that applies to consumer expenditure. It is charged on the supply of goods and services within a country by a registered person where such supplies are not exempt or subject to a zero rate of tax. VAT is also charged on imports. Canada's goods and services tax is a form of VAT. It applies at each stage of the production and distribution chain. To ensure that tax applies only once to the final consideration paid for a consumer expenditure, registered businesses are entitled to credits for tax paid on inputs into making taxable supplies.
a sales tax collected at each stage of production, excluding the already-taxed costs from previous stages.