General Principles

What is VAT?

Value Added Tax (or VAT) is an indirect tax. It is also referred to as a type of general consumption tax. It is imposed on most supplies of goods and services that are bought and sold.

​

VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government.

​

Input VAT is the value added tax added to the price when goods are purchased or services are rendered. If the buyer is registered in the VAT Register, the buyer can deduct the amount of VAT paid from his/her settlement with the tax authorities

​

Output VAT is the value added tax calculated and charged on the sales of goods and services