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No, they are not the same thing. You pay VAT on the value added at each part of the process. So a retailer pays VAT to their wholesaler, unlike American state sales tax systems.


Yeah, but the retailer then deducts that VAT from the amount charged to the customer, so in the end it's the same, only the final customer pays VAT.


No. VAT is across the supply chain, provided they are all VAT registered. So as a business you only pay The net VAT between sales and purchases.


Er, that's what I said/meant? This is unlike US sales tax, which is only applied at the end, and on the entire value of the sale, not the value added.

Edit: Ok I see, the "you" I had in my post was confusing. VAT is charged on the value added at each point of the chain, again unlike sales/use tax.


Which is why I said 'pretty much'. In this discussion they can be regarded as the same thing.




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