Encyclopedia Britannica
Encyclopedia Britannica
SUBSCRIBE
SUBSCRIBE
SUBSCRIBE
Ask the Chatbot Games & Quizzes History & Society Science & Tech Biographies Animals & Nature Geography & Travel Arts & Culture ProCon Money Videos
Related Questions
  • How does taxation relate to government revenue?
Discover
Close up of a hand filling out a corporate income tax form. Form 1120 IRA. Department of the Treasury Internal Revenue Service
Pro and Con: Corporate Income Tax Rate
Berries and leaves of the bittersweet nightshade (Solanum dulcamara) plant. Poisonous plant
7 of the World’s Deadliest Plants
Human Cannibalism; Johannes Lerii's account of the description of the method the Indians use for "barbecuing" human flesh. Nude Indians barbecuing and eating parts of human bodies; Theodor de Bry.
Cannibalism: Cultures, Cures, Cuisine, and Calories
Close up of books. Stack of books, pile of books, literature, reading. Homepage 2010, arts and entertainment, history and society
12 Novels Considered the “Greatest Book Ever Written”
Amendments 1-10 to the Constitution of the United States constitute what is known as the Bill of Rights on an American flag.
What Is the Emoluments Clause?
Illustration for Demystified "How Dangerous is Quicksand"
How Deadly Is Quicksand?
Ethel Rosenberg arrested in August 1950. Photograph dated Aug. 8, 1950. American civilians executed for espionage. Spies, communists, Julius Rosenberg
Spies Like Us: 10 Famous Names in the Espionage Game

What is VAT (value-added tax)?

External Websites
Written and fact-checked by
The Editors of Encyclopaedia Britannica
Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.
The Editors of Encyclopaedia Britannica

Value-added tax (VAT) is a type of indirect taxation levied by a government on the amount that a business adds to the price of a commodity during production and distribution of a good. VAT is collected through the credit method, which recognizes and adjusts for the taxes paid on previously purchased inputs.

Related Questions

  • How does taxation relate to government revenue?
Feedback
Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login).
Thank you for your feedback

Our editors will review what you’ve submitted and determine whether to revise the article.

verifiedCite
While every effort has been made to follow citation style rules, there may be some discrepancies. Please refer to the appropriate style manual or other sources if you have any questions.
Select Citation Style
The Editors of Encyclopaedia Britannica. "What is VAT (value-added tax)?". Encyclopedia Britannica, 14 Mar. 2025, https://www.britannica.com/question/What-is-VAT-value-added-tax. Accessed 19 May 2025.
Share
Share to social media
Facebook X
URL
https://www.britannica.com/question/What-is-VAT-value-added-tax