Supply of Goods
As a consumption tax, the general rule is that the VAT is ultimately collected where the goods are purchased by the consumer. The supply of goods (the exchange of goods for consideration) is a taxable transaction, that is, VAT at the appropriate rate is added to the purchase price. If the purchaser is a business (a taxable person) that is not the final consumer, it may reclaim as a credit the VAT paid on the purchase. When the business resells the goods, VAT is added to the resale price. The taxable person then pays to the government the VAT on the resale, less a credit for the VAT on the purchase, and in effect thus pays to the government tax on the value added. The supply of goods follows a chain of businesses until it reaches the final consumer. The final consumer does not receive a credit for the VAT paid so that the final consumer bears the cost of the VAT.
Read more about this topic: European Union Value Added Tax
Famous quotes containing the words supply of, supply and/or goods:
“Odors from decaying food wafting through the air when the door is opened, colorful mold growing between a wet gym uniform and the damp carpet underneath, and the complete supply of bath towels scattered throughout the bedroom can become wonderful opportunities to help your teenager learn once again that the art of living in a community requires compromise, negotiation, and consensus.”
—Barbara Coloroso (20th century)
“What would we not give for some great poem to read now, which would be in harmony with the scenery,—for if men read aright, methinks they would never read anything but poems. No history nor philosophy can supply their place.”
—Henry David Thoreau (1817–1862)
“A man hath no better thing under the sun, than to eat, and to drink, and to be merry.”
—Bible: Hebrew Ecclesiastes, 8:15.
Compare with Luke 12:19: “And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry.”