|
==Comparison with sales tax==
Value-added taxVAT has no effect on how businesses organize, because the same amount of tax is collected regardless of how many times goods change hands before arriving at the ultimate consumer. By contrast, sales taxes are collected on each transaction, encouraging businesses to [[Vertical integration|vertically integrate]] to reduce the number of transactions and thereby reduce the amount of tax. For this reason, VAT has been gaining favor over traditional sales taxes.
Another difference is that VAT is collected at the national level, while in countries such as India and the US, sales tax is collected at the point of sale by the local jurisdiction, leading them to prefer the latter method.
B2B sales between countries have different rules, such that the reverse charge (VAT) or sales tax exemption are applied; in the case of B2C sales the seller pays the VAT or sales tax to the receiving jurisdiction (creating the controversial situation of a foreign company paying taxes of their taxable residents/citizens without jurisdiction on seller).
==Around theCriticisms world==
[[File:Campaña nomasiva.com 049.jpg|thumb|4 May 2010 "Campaña no más IVA" in Spain]] ▼The "value-added tax"VAT has been criticized as theits burden of it falls on personal end-consumers of products. SomeIt critics consider it to beis a [[regressive tax]], meaning that the poor pay more, as a percentage of their income, than the rich , given their higher [[marginal propensity to consume]].<ref name="auto">{{cite web |date=13 December 2018 |title=Options for Reducing the Deficit: 2019 to 2028 |url=https://www.cbo.gov/budget-options/2018/54820 |publisher=Congressional Budget Office |access-date=1 March 2020 | datepublisher= 13Congressional DecemberBudget 2018Office}}</ref> Defenders arguereply that relating taxation levels to income is an arbitrary standard , and that the value-added taxVAT is in fact a [[proportional tax]] ;. anAn [[OECD]] study found that itVAT could be slightly progressive—but still have significant equity implications for the poor—as people with higher income pay more as they consume moreprogressive.<ref name= "oecd ">{{cite report | url=https://www.oecd-ilibrary.org/deliver/4a494083-en.pdf?itemId=%2Fcontent%2Fpaper%2F4a494083-en&mimeType=pdf |title=OECD Taxation Working Papers: Reassessing the regressivity of the VAT | series=OECD Taxation Working Papers | year=2022 | publisher=Organisation for Economic Co-Operation and Development (OECD) | doi=10.1787/22235558 |issn=2223-5558 | doi=10.1787/22235558|doi-access=free | series=OECD Taxation urlWorking Papers |year= https://www.oecd-ilibrary.org/deliver/4a494083-en.pdf?itemId=%2Fcontent%2Fpaper%2F4a494083-en&mimeType=pdf 2022}}</ref><ref>{{Cite web |last=Enache |first=Cristina |date=13 August 2020 |title=Contrary to Popular Belief, Value-Added Taxes Found to Be Slightly Progressive |last=Enache |first=Cristina |work=Tax Foundation|date = 13 August 2020 |url= https://taxfoundation.org/value-added-tax-vat-progressive/ |work=Tax Foundation}}</ref> TheVAT's effective regressivenessregressivity ofcan abe VATreduced systemby canapplying alsoa belower affectedrate whento differentproducts classesthat ofare goodsmore arelikely taxedto atbe differentconsumed ratesby the poor.<ref name="auto" /> Some countries compensate by implementing a VAT have reducedprogressive income tax onor lower income-earners as well as instituted directby transfer payments targeted to lower-income groups, resulting in lowering tax burdens on the poor.<ref>Chia-Tern Huey Min (October 2004) [https://web.archive.org/web/20071129192831/http://adb.org/Documents/Events/2004/Fourteenth-Tax-Conference/text-chia.pdf GST in Singapore: Policy Rationale, Implementation Strategy & Technical Design], Singapore Ministry of Finance.</ref> ▼
RevenuesVAT from a value-added taxrevenues are frequently lower than expected because they are difficult and costly to administer and collect.{{Citation needed|date=November 2017}} In many countriesHowever, however, where collection of personal incomeother taxes andmay corporateface profitsimilar taxesor hasworse been historically weak, VAT collection has been more successful than other types of taxeschallenges. VAT has become more important in many jurisdictions as [[tariff ]] levels have fallen worldwide due to trade liberalization, as VAT has essentiallyeffectively replaced lostreduced tariff revenues. Whether the costs and distortions of value-added taxes are lower than the economic inefficiencies and enforcement issues (e.g. smuggling) from high import tariffs is debated, but theory suggests value-added taxesVATs are far more efficient.{{citation needed|date=September 2017}} ▼
Certain industries (small-scale services, for example) tend to have more VAT [[Tax avoidance|avoidance]], particularly where cash transactions predominate, and VAT may be criticized for encouraging this.{{Citation needed|date=November 2017}} From the perspective of government, however, VAT may be preferableacceptable because it captures at least some of the value added. For example, a building contractor may offer to provide services ''for cash'' (i.e. without a receipt, and without VAT) to a homeowner, who usually cannot claim input VAT back. The homeowner will thus bear lower costs and the building contractor may be able to avoid other taxes (profit or payroll taxes) {{citation needed|date=May 2018}}transactions. Another avenue of criticism of implementing a VAT is that the increased tax passed to the consumer willcosts increase the ultimate price paid by the consumer. ▼
The incidence of VAT may not fall entirely on consumers as traders tend to absorb VAT so as to maintain sales volumes of sales. Conversely, not all cuts in VAT are passed on in lower prices. VAT consequently leads to a deadweight loss if cutting prices pushes a business below the margin of profitability. The effect can be seen when VAT is cut or abolished. WhenSweden reduced VAT on restaurant meals in Sweden was reduced from 25% to 12.5%, creating 11,000 additional jobs were created.<ref>{{Cite web |title=Rätt lagat? Effekter av sänkt moms på restaurang- och cateringtjänster i Sverige |url=https://www.nationalekonomi.se/sites/default/files/2016/09/44-5-bfjmst.pdf |access-date=5 October 2023 |website=www.nationalekonomi.se}}</ref> ▼
VAT offers distinctive opportunities for evasion and fraud, especially through abuse of the credit and refund mechanism.<ref>{{cite web |last1=Crawford |first1=Ian |last2=Keen |first2=Michael |last3=Smith |first3=Stephen |title=Value Added Tax and Excises |url=https://ifs.org.uk/mirrleesreview/dimensions/ch4.pdf |website=[[Institute for Fiscal Studies]]}}</ref> VAT overclaim fraud reached as high as 34% in Romania.<ref>{{cite web |title=VAT Gap |url=https://ec.europa.eu/taxation_customs/vat-gap_en}}</ref>
ThisExports kindare generally [[Zero-rated supply|zero-rated]], creating opportunity for fraud. In Europe, the main source of problems is [[carousel fraud]].{{Citation needed|date=December 2007}} This fraud originated in the 1970s in the [[Benelux]] countries. Today, VAT fraud isthen became a major problem in the [[UK ]].<ref>O'Grady, Sean (26 July 2007) "[https://web.archive.org/web/20081224045212/http://www.independent.co.uk/news/business/news/carousel-fraud-has-cost-uk-up-to-16316bn-458771.html Carousel fraud 'has cost UK up to £16bn']", ''The Independent''.</ref> There are also similarSimilar fraud possibilities exist inside a country. To avoid this, incountries somesuch countriesas likeSweden Sweden,hold the major owner of a limited company is personally responsible for taxes.<ref name="economyincrisis.org" >{{Cite web |title=Now is the Time to Reform the Income Tax with a VAT! | Economy in Crisis |url=http:/ /economyincrisis.org/content/now-is-the-time-to-reform-the-income-tax-with-a-vat |url-status=dead |archive-url=https://web.archive.org/web/20160323111240/http://economyincrisis.org/content/now-is-the-time-to-reform-the-income-tax-with-a-vat |archive-date=23 March 2016 |access-date=17 March 2016}}</ref> ▼
===Churning===
Because VAT is included in the price index to which state benefits such as pensions and welfare payments are linked in some countries, as well as public sector pay, some of the apparent revenue is churned – i.e. taxpayers have to beare given the money to pay the tax with, resulting in zeroreducing net revenue.<ref>{{cite web | url=https://www.landvaluetax.org/taxation/the-dead-loss-of-vat | title=The dead loss of VAT | Taxation | Current affairs | Comment |url=https://www.landvaluetax.org/taxation/the-dead-loss-of-vat}}</ref> ▼
===Business cashflow ===
Refund delays by the tax administration can damage businesses.<ref name="PWC" />
Compliance costs forare VATseen areas a heavy burden on business.<ref>{{Cite web |title=The impact of VAT compliance on business |url=https://www.pwc.com/gx/en/tax/pdf/impact-of-vat.pdf |access-date=2022-05-30 |website=PricewaterhouseCoopers}}</ref> In the UK, compliance costs for VAT have been estimated by Professor Cedric Sandford to be about 4% of the yield, thoughwith thegreater figureimpacts is higher foron smaller businesses.<ref>{{Cite web |title=VAT Software: compliance costs |last=Abolins |first=Jon |website=Accountancy Daily |date=1 May 2002 |title=VAT Software: compliance costs |url= https://www.accountancydaily.co/vat-software-compliance-costs |website=Accountancy Daily}}</ref> ▼
[[File:Counties_with_VAT_tax.jpeg|upright=1.8|thumb|right|National VAT act as a tariff on imports and their exports are exempt from VAT ([[Zero-rated supply|zero-rated]]).<ref name="economyincrisis.org" />]]
Under a sales tax system, only businesses selling to the end-user are required to collect tax and bear the accounting cost of collecting the tax. Under VAT, manufacturers and wholesale companies also incur accounting expenses to handle the additional paperwork required for collecting VAT, increasing overhead costs and prices. ▼
ManyThe politiciansAmerican andManufacturing economistsTrade Action Coalition in the United States consider value-addedVAT taxationcharges on US goodsproducts and VAT rebates for goodsproducts from other countries to be unfair practice. For example, thean [[ Americanunfair Manufacturingtrade Trade Action Coalitionpractice]] claims that any rebates or special taxes on imported goods should not be allowed by the rules of the World Trade Organisation. AMTAC claims that so-called "border tax disadvantage" is the greatest contributing factor to the $5.8 trillion US [[current account deficit]] for the decade of the 2000s, and estimated this disadvantage to US producers and service providers to be $518 billion in 2008 alone. Some US politicians , such as congressman [[Bill Pascrell]], are advocatingadvocate either changing WTO rules relating to VAT or rebating VAT charged on US exporters by passing the [[Border Tax Equity Act]].<ref>{{cite web | url=http://www.amtacdc.org/Pages/Policy-Issues.aspx#VAT |title=Border Adjusted Taxation / Value Added Tax (VAT) | publisherurl= Amtacdchttp://www.amtacdc.org /Pages/Policy-Issues.aspx#VAT |access-date=30 April 2012 |publisher=Amtacdc.org}}</ref> A business tax rebate for exports is alsowas proposed in the 2016 [[Republican Party (United States)|GOP]] policy paper for tax reform policy paper.<ref name="Marc A. Thiessen">{{cite news | |last=Thiessen |first=Marc A. | date=17 January 2017 |title=Yes, Trump can make Mexico pay for the border wall. Here's how. |url=https://www.washingtonpost.com/opinions/yes-trump-can-make-mexico-pay-for-the-border-wall-heres-how/2017/01/17/7edf7872-dcbf-11e6-ad42-f3375f271c9c_story.html |access-date=17 January 2017 |newspaper=The Washington Post |date=17 January 2017}}</ref><ref name="GOP Tax Reform 2016" /> The assertion that this "border adjustment" would be compatible with the rules of the WTO is controversial; it was alleged that the proposed tax would favour domestically produced goods as they would be taxed less than imports, to a degree varying across sectors. For example, the wage component of the cost of domestically produced goods would not be taxed.<ref>{{cite news |last1=Freund |first1=Caroline |author-link1=Caroline Freund |date=18 January 2017 |title=Trump Is Right: 'Border Adjustment' Tax Is Complicated | |url=https://www.bloomberg.com/view/articles/2017-01-18/trump-is-right-border-adjustment-tax-is-complicated |access-date=19 January 2017 |work=BloombergView |publisher=Bloomberg LP |date=18 January 2017}}</ref> ▼
A 2021 study in the ''American Economic Journal'' foundreported that value- added taxes arewere unlikely to distort trade flows.<ref>{{Cite journal |last1=Benzarti |first1=Youssef |last2=Tazhitdinova |first2=Alisa |date=2021 |title=Do Value-Added Taxes Affect International Trade Flows? Evidence from 30 Years of Tax Reforms |url=http://www.nber.org/papers/w26195.pdf |journal=American Economic Journal: Economic Policy |language=en |volume=13 |issue=4 |pages=469–489 |doi=10.1257/pol.20190492 |s2cid=240240194 |issn=1945-7731 |s2cid=240240194}}</ref> ▼
== Around the world ==
[[File:VAT Rates of Countries.svg|thumb|300px|VAT rate by country
{{legend|#c0c0c0|No VAT}}
===Armenia===
{{Main|Taxation in Armenia}}
InThe Armenia,VAT the value added tax (VAT)rate is 20%. However, the expanded application is zero VAT for many operations and transactions in Armenia. That zero VAT is the source of controversies between theits tradetrading partners and Armenia, mainly between Russia, which is against the zero VAT and promotes wider use of tax credits. VAT is replaced with fixed payments, which are utilized for many taxpayers, operations, and transactions. Legislation is based largely on the EU VAT Directive's principles.<ref name="Armenia - Corporate - Other taxes">{{Cite web|url=https://taxsummaries.pwc.com/armenia/corporate/other-taxes|title=Armenia - Corporate - Other taxes|website=taxsummaries.pwc.com}}</ref>
VAT is replaced with fixed payments, which are utilized for many taxpayers, operations, and transactions.
The present VAT legislation in Armenia is based largely on the EU VAT Directive's principles.<ref name="Armenia - Corporate - Other taxes">{{Cite web|url=https://taxsummaries.pwc.com/armenia/corporate/other-taxes|title=Armenia - Corporate - Other taxes|website=taxsummaries.pwc.com}}</ref>
VATThe system is purchasedinput-output quarterlybased. However,Producers itare allowed to subtract VAT on their inputs from the VAT they charge on their outputs and report the difference.<ref name="Armenia - Corporate - Other taxes"/> VAT is anpurchased quarterly. An exception whenoccurs for taxpayers who state monthly payments. VAT is disbursed to the state's budget untilon the 20th day of the month after the tax period.<ref>[http://www.tacentral.com/economy.asp?story_no=9 The tax system in Armenia: Economy: Armenia travel, history, Archeology & Ecology: Tourarmenia: Travel guide to Armenia. THE TAX SYSTEM IN ARMENIA | Economy | Armenia Travel, History, Archeology & Ecology | TourArmenia | Travel Guide to Armenia. (n.d.). Retrieved December 3, 2022.]</ref> The law took effect on January 1, 2022.<ref>[https://www.vertexinc.com/resources/resource-library/armenia-change-vat-rules-covering-digital-services-supplied-non#:~:text=The%20rules%20in%20Armenia%20come,to%20these%20sales%20is%2020%25. Armenia to change VAT rules covering digital services supplied by non-residents. Vertex, Inc. (2022, March 14). Retrieved December 3, 2022 ]</ref>▼The VAT system in Armenia is input-output based. Companies who have registered for VAT are allowed to subtract the VAT on their inputs from the VAT they charged on their sales and report the difference to the tax authorities.<ref name="Armenia - Corporate - Other taxes"/>
▲VAT is purchased quarterly. However, it is an exception when taxpayers state monthly payments. VAT is disbursed to the state's budget until the 20th day of the month after the tax period.<ref>[http://www.tacentral.com/economy.asp?story_no=9 The tax system in Armenia: Economy: Armenia travel, history, Archeology & Ecology: Tourarmenia: Travel guide to Armenia. THE TAX SYSTEM IN ARMENIA | Economy | Armenia Travel, History, Archeology & Ecology | TourArmenia | Travel Guide to Armenia. (n.d.). Retrieved December 3, 2022.]</ref>
It came into effect on January 1, 2022. The draft law on the VAT plans were passed on November 11, 2021, and the plans were accepted on November 17.<ref>[https://www.vertexinc.com/resources/resource-library/armenia-change-vat-rules-covering-digital-services-supplied-non#:~:text=The%20rules%20in%20Armenia%20come,to%20these%20sales%20is%2020%25. Armenia to change VAT rules covering digital services supplied by non-residents. Vertex, Inc. (2022, March 14). Retrieved December 3, 2022 ]</ref>
===Australia===
{{Main|Goods and services tax (Australia)}}
The goods and services tax (GST) is a value-added taxVAT introduced in Australia in 2000, which is collected by the [[Australian Tax Office]]. The revenue is then redistributed to the states and territories via the Commonwealth Grants Commission process. In essence, this is Australia's program of [[Equalization payments|horizontal fiscal equalisation]]. Whilst the rate is currently set at 10%, there are many domestically consumed items that are effectively zero-rated (GST-free) such as fresh food, education, and health services, certain medical products, as well as exemptions for Government charges and fees that are themselves in the nature of taxes.
===Bangladesh===
{{Main|Taxation in Bangladesh}}
Value-added tax (VAT) in Bangladesh was introduced in 1991, replacing sales tax and most excise duties. The Value Added Tax Act, 1991 was enacted that year and VAT started its passage from 10 July 1991. In Bangladesh, 10 July is observed as National VAT Day. Within the passage of 25 years, VAT has become the largest source of Government Revenue. About 56% of total tax revenue is VAT revenue in Bangladesh. Standard VAT rate is 15%. Export is zero rated. Besides these rates there are several reduced rates, locally called Truncated Rates, for service sectors ranging from 1.5% to 10%. To increase the productivity of VAT, the Government enacted the Value Added Tax and Supplementary Duty Act of 2012. This law was initially scheduled to operate online with an automated administration from 1 July 2017, however this pilot project was extended for another two years.<ref>{{Cite news |date=August 8, 2017 |title=NBR seeks extension of time, cost for VAT online project |pages=1 |work=New Age |url=https://www.newagebd.net/article/21547/nbr-seeks-extension-of-time-cost-for-vat-online-project}}</ref>
The [[National Board of Revenue]] (NBR) of the Ministry of Finance of the Government of Bangladesh is the apex organization administering the value-added taxVAT. Relevant rules and acts include: Value Added Tax Act, 1991;<ref>{{Cite web |title=5.pdf |url=https://nbr.gov.bd/uploads/acts/5.pdf |website=[[National Board of Revenue]]}}</ref><ref name=":3" /><ref>{{Cite web |title=8.pdf |url=http://nbr.gov.bd/uploads/rules/8.pdf |website=[[National Board of Revenue]]}}</ref><ref>{{Cite web |title=13.pdf |url=http://nbr.gov.bd/uploads/rules/13.pdf |website=[[National Board of Revenue]]}}</ref> Value Added Tax and Supplementary Duty Act, 2012;<ref name=":3">{{Cite web |title=বাংলাদেশ জাতীয় সংসদ |url=https://nbr.gov.bd/uploads/acts/6.pdf |access-date=5 October 2023 |website=nbr.gov.bd}}</ref> Development Surcharge and Levy (Imposition and Collection) Act, 2015;<ref>{{Cite web |title=Microsoft Word - 3472-Act-20-National Parliament-21 November 2015_9075-9077 |url=https://nbr.gov.bd/uploads/acts/26.pdf |access-date=5 October 2023 |website=nbr.gov.bd}}</ref> and Value Added Tax and Supplementary Duty Rules, 2016.<ref>{{Cite web |title=VATR2016 |url=https://nbr.gov.bd/uploads/rules/VATR2016.pdf |access-date=5 October 2023 |website=nbr.gov.bd}}</ref> Anyone who is selling a product and collects VAT from buyers becomes a VAT Trustee if they: register their business and collect a Business Identification Number (BIN) from the NBR; submit VAT returns on time; offer VAT receipts to consumers; store all cash-memos; and use the VAT rebate system responsibly. Anyone who works in the VAT or Customs department in the NBR and deals with VAT trustees is a VAT Mentor. The flat rate of VAT is 15%.
===Barbados===
=== Bulgaria ===
{{Main|Taxation in Bulgaria}}
Value-added tax (VAT) in Bulgarian is currently 20% as of 2023. The reduced VAT rate of 9% on baby foods and hygiene products, as well as on books, is made permanent (it was due to expire at the end of 2022). A permanent reduced VAT rate of 9% will also apply to physical or electronic periodicals, such as newspapers and magazines, as of 1 January 2023.
===Canada===
{{Main|European Union value added tax}}
The [[European Union value added tax|European Union value-added taxVAT]] (EU VAT) covers consumption of goods and services and is mandatory for [[Member state of the European Union|member states of the European Union]]. The EU VAT's key issue asks where the supply and consumption occurs thereby determining which member state will collect the VAT and which VAT rate will be charged.
Each member state's national VAT legislation must comply with the provisions of EU VAT law,<ref>Directive 2006/112/EC</ref> which requires a minimum standard rate of 15% and one or two reduced rates not to be below 5%. Some EU members have a 0% VAT rate on certain supplies; these states would have agreed this as part of their EU Accession Treaty (for example, newspapers and certain magazines in Belgium). Certain goods and services must be exempt from VAT (for example, postal services, medical care, lending, insurance, betting), and certain other goods and services to be exempt from VAT but subject to the ability of an EU member state to opt to charge VAT on those supplies (such as land and certain financial services). The highest rate currently in operation in the EU is 27% (Hungary), though member states are free to set higher rates. There is, in fact, only one EU country (Denmark) that does not have a reduced rate of VAT.<ref>{{Cite web|date=2021-01-01|title=VAT rates applied in the Member States of the European Union|url=https://ec.europa.eu/taxation_customs/sites/default/files/vat_rates_en.pdf|access-date=2021-07-03|website=[[European Commission]]}}</ref>
===Indonesia===
{{Further|Taxation in Indonesia}}
Value-added tax (VAT) was introduced into the Indonesian taxation system from 1 April 1985. General VAT rate is ten percent. There are currently plans to raise the standard VAT rate to 12%. Using indirect subtraction method with invoice to calculate value-added taxVAT payable. VAT was Collected by the Directorate General of Taxation, Ministry of Finance. Some goods and services are exempt from VAT like basic commodities vital to the general public, medical or health services, religion services, educational services and Services provided by the government in respect of carrying out general governmental administration.
===Italy===
===Israel===
{{Further|Taxation in Israel}}
Value-added tax (VAT) was first imposed in Israel on 1 July 1976, by virtue of the Value Added Tax Law, following the recommendations of the Asher Committee, which dealt with this matter during the first Rabin government. The initial rate of VAT was 8%.
From June 2013 to September 2015, the VAT rate was 18 percent. Since then, the VAT rate in Israel has been 17%.
===Japan===
{{Further|Taxation in Japan}}
Value-added taxVAT was first implemented in Japan in 1989.<ref name=":4">{{Cite journal |last=Takahashi |first=Ryotaro |date=2024 |title=Tale of a Missed Opportunity: Japan's Delay in Implementing a Value-Added Tax |url=https://www.cambridge.org/core/journals/social-science-history/article/tale-of-a-missed-opportunity-japans-delay-in-implementing-a-valueadded-tax/E51BF2A1C41495A456E5DD797B2B7908 |journal=Social Science History |pages=1–25 |language=en |doi=10.1017/ssh.2024.1 |issn=0145-5532|doi-access=free }}</ref> Tax authorities debated the implementation of a VAT in the 1960s and 1970s, but decided against it at the time.<ref name=":4" />
From 1 October 2019, the standard VAT rate in Japan is 10% for most goods. However food, beverages, newspaper subscriptions with certain criteria and other necessities apply for a reduced rate of 8%. Transactions including land sales or lease, securities sales and the provision of public services are exempt from taxation.<ref>{{Cite web |title=Japan - Corporate - Other taxes |url=https://taxsummaries.pwc.com/japan/corporate/other-taxes |access-date=2024-04-16 |website=taxsummaries.pwc.com |language=en-gb}}</ref>
===Malaysia===
{{Main|Goods and Services Tax (Malaysia)}}
The goods and services tax (GST) is a value-added taxVAT introduced in Malaysia in 2015, which is collected by the Royal Malaysian Customs Department. The standard rate is currently set at 6%. Many domestically consumed items such as fresh foods, water, electricity and land public transportation are zero-rated, while some supplies such as education and health services are GST exempted. After being revised by the newly elected government after the General Election 14, GST will be removed across Malaysia from 1 June 2018 onwards.
As of 8 August 2018, the goods and services tax (GST) has been abolished and replaced by sales and services tax (SST) under the new government which promised to do so in their manifesto.<ref>{{Cite news
===Mexico===
Value-added taxVAT ({{lang-es|link=no|Impuesto al Valor Agregado}}, IVA) is a tax applied in Mexico and other countries of Latin America. In Chile, it is also called {{Lang|es|Impuesto al Valor Agregado}} and, in Peru, it is called {{Lang|es|Impuesto General a las Ventas}} or ''IGV''.
Prior to the IVA, a sales tax ({{lang-es|link=no|impuesto a las ventas}}) had been applied in Mexico. In September 1966, the first attempt to apply the IVA took place when revenue experts declared that the IVA should be a modern equivalent of the sales tax as it occurred in France. At the convention of the Inter-American Center of Revenue Administrators in April and May 1967, the Mexican representation declared that the application of a value-added taxVAT would not be possible in Mexico at the time. In November 1967, other experts declared that although this is one of the most equitable indirect taxes, its application in Mexico could not take place.
In response to these statements, direct sampling of members in the private sector took place as well as field trips to European countries where this tax was applied or soon to be applied. In 1969, the first attempt to substitute the mercantile-revenue tax for the value-added taxVAT took place. On 29 December 1978 the Federal government published the official application of the tax beginning on 1 January 1980 in the [[Diario Oficial de la Federación|Official Journal of the Federation]].
As of 2010, the general VAT rate was 16%. This rate was applied all over Mexico except for bordering regions (i.e. the United States border, or Belize and Guatemala), where the rate was 11%. The main exemptions are for books, food, and medicines on a 0% basis. Also some services are exempt like a doctor's medical attention. In 2014 Mexico Tax Reforms eliminated the favorable tax rate for border regions and increased the VAT to 16% across the country.
===New Zealand===
{{Main|Goods and Services Tax (New Zealand)}}
The goods and services tax (GST) is a value-added taxVAT that was introduced in New Zealand in 1986, currently levied at 15%. It is notable for exempting few items from the tax. From July 1989 to September 2010, GST was levied at 12.5%, and prior to that at 10%.
===The Nordic countries===
|}
In Denmark, VAT is generally applied at one rate, and with few exceptions is not split into two or more rates as in other countries (e.g. Germany), where reduced rates apply to essential goods such as foodstuffs. The current standard rate of VAT in Denmark is 25%. That makes Denmark one of the countries with the highest value-added taxVAT, alongside Norway, Sweden and Croatia. A number of services have reduced VAT{{citation needed|date=December 2020}}, for instance public transportation of private persons, health care services, publishing newspapers, rent of premises (the lessor can, though, voluntarily register as VAT payer, except for residential premises), and travel agency operations.
In Finland, the standard rate of VAT is 24% as of 1 January 2013 (raised from previous 23%), along with all other VAT rates, excluding the zero rate.<ref>{{cite news |last=Vuoristo |first=Pekka |date=26 August 2009 |title=Hallitus sopuun ruan veroalesta |url=http://www.hs.fi/politiikka/artikkeli/Hallitus+sopuun+ruuan+veroalesta+-+makeisvero+palautetaan+k%C3%A4ytt%C3%B6%C3%B6n/1135248823600 |work=[[Helsingin Sanomat]] |archive-url=https://web.archive.org/web/20090828013337/http://www.hs.fi/politiikka/artikkeli/Hallitus+sopuun+ruuan+veroalesta+-+makeisvero+palautetaan+k%C3%A4ytt%C3%B6%C3%B6n/1135248823600 |archive-date=28 August 2009 |access-date=26 August 2009}}</ref> In addition, two reduced rates are in use: 14% (up from previous 13% starting 1 January 2013), which is applied on food and animal feed, and 10%, (increased from 9% 1 January 2013) which is applied on passenger transportation services, cinema performances, physical exercise services, books, pharmaceuticals, entrance fees to commercial cultural and entertainment events and facilities.
=== Poland ===
Polish Ministry of Finance implemented Value Added Tax for the first time in 1993. The taxation system includes one standard rate of 23%, along with three reduced rates: 8%, 5%, and 0%. Items and services eligible for the reduced 8% are certain food products, newspapers, goods and services related to agricultural production, medicine, sport and culture and others. The complete list is in Annex 3 to the VAT Act. The second reduced rate, set at 5%, applies to basic food items (such as meat, fruits, vegetables, dairy and bakery products), children's items, hygiene products, and books. Meanwhile, the zero rate is applicable to exported goods, international transport services, supply of specific computer hardware to educational institutions, vessels, and air transport.
Taxi services that do not involve the rental of passenger cars with drivers may opt for a flat-rate tax of 4%. Additionally, flat-rate farmers supplying agricultural goods to VAT taxable entities are eligible for a 7% refund of the value-added taxVAT.<ref>{{Cite web |title=List of VAT rates |url=https://www.podatki.gov.pl/en/value-added-tax/general-vat-rules-and-rates/list-of-vat-rates/ |access-date=2024-04-16 |website=www.podatki.gov.pl |language=en-US}}</ref>
=== Russia ===
{{Further|Taxation in Russia}}
According to the Russian tax code the value-added taxVAT is levied at the rate of 20% for all goods with several exemptions for several types of products and services (like medicare etc.).
Taxpayers of value-added taxVAT are recognized:
Organizations (industrial and financial, state and municipal enterprises, institutions, business partnerships, insurance companies and banks), enterprises with foreign investments, individual entrepreneurs,
international associations and foreign legal entities that carry out entrepreneurial activities in the territory of the Russian Federation, non-commercial organizations in the event of their commercial activities, and persons recognized as taxpayers of value-added taxVAT in connection with the movement of goods across the customs border of the Customs Union.<ref>{{Cite web|url=http://taxsummaries.pwc.com/ID/Russian-Federation-Corporate-Other-taxes|title=Russian Federation - Other taxes impacting corporate entities, Value-added tax (VAT)}}</ref><ref>{{Cite web|url=https://rg.ru/2007/03/12/nalog-kodeks2.html|title=Налоговый кодекс Российской Федерации. Часть вторая от 5 августа 2000 г. N 117-ФЗ|website=Российская Газета|trans-title=Russian Federation Tax Code, Part 2 August 5, 2000 N 117 Federal Law|quote=3. Налогообложение производится по налоговой ставке 18 процентов в случаях, не указанных в пунктах 1, 2 и 4 настоящей статьи.}}</ref><ref>{{Cite book|url=https://www.nalog.ru/html/sites/www.eng.nalog.ru/Tax%20Code%20Part%20Two.pdf|title=TAX CODE OF THE RUSSIAN FEDERATION PART II, Article 164 Tax Rates|publisher=Russian Ministry of Finance|pages=41}}</ref>
===Singapore===
===South Africa===
Value-added tax (VAT) in South Africa was set at a rate of 14% and remained unchanged since 1993. Finance Minister Malusi Gigaba announced on 21 February 2018 that the VAT rate will be increased by one percentage point to 15%. Some basic food stuffs, as well as paraffin, will remain zero-rated. The new rate is to be effective from 1 April 2018.<ref>{{cite web| url = https://www.fin24.com/Budget/full-speech-gigabas-budgetspeech2018-20180221| title = Budget Speech 2018| language = en| access-date = 21 February 2018| publisher = Fin24}}</ref>
===Switzerland and Liechtenstein===
===Taiwan===
{{Main|Taxation in Taiwan}}
Value-added tax (VAT) in Taiwan is currently 5% as of 1 June 2023. It is levied on all domestic sales of goods and services as well as the importation of goods. However, certain exceptions exist, including exported goods and associated services, vessels, and aircraft used in international transportation, and deep-sea fishing boats.<ref>{{Cite web |last=PricewaterhouseCoopers |title=Taiwan Pocket Tax Book |url=https://www.pwc.tw/zh/publications/topic-tax/taiwan-pocket-tax-book.html |access-date=2024-04-16 |website=PwC |language=zh-tw}}</ref>
===Trinidad and Tobago===
Value-added tax (VAT) in T&T is currently 12.5% as of 1 February 2016. Before that date VAT used to be at 15%.
=== Ukraine ===
===United States===
{{Further|Sales taxes in the United States}}
In the United States, currently, there is no federal value-added tax (VAT) on goods or services. Instead, a sales and use tax [[Sales taxes in the United States|is used in most US states]]. VATs have been the subject of much scholarship in the US and are one of the most contentious tax policy topics.<ref>{{cite court |litigants=Trinova Corp. v. Michigan Dept. of Treasury |vol=498 |reporter=U.S. |opinion=358 |pinpoint=362 |court=[[United States Supreme Court]] |date=1991 |url=https://scholar.google.com/scholar_case?case=2384909052279682312&q=credit+%22use+tax%22+VAT |quote=Although in Europe and Latin America VAT's are common,...in the United States they are much studied but little used.}}</ref><ref>{{cite news|last1=Gulino|first1=Denny|title=Puerto Rico May Finally Get Attention of Republican Lawmakers|url=https://mninews.marketnews.com/content/puerto-rico-may-finally-get-attention-republican-lawmakers|access-date=9 February 2016|publisher=MNI|date=18 September 2015|quote=The concept of a value added tax in any form as part of the U.S. tax regime has consistently raised the hackles of Republican policy makers and even some Democrats because of fears it could add to the tax burden rather than just redistribute it to consumption from earnings. For decades one of the most hotly debated tax policy topics, a VAT imposes a sales tax at every stage where value is added.}}</ref>
In 2015, [[Puerto Rico]] passed legislation to replace its 6% sales and use tax with a 10.5% VAT beginning 1 April 2016, although the 1% municipal sales and use tax will remain and, notably, materials imported for manufacturing will be exempted.<ref>{{cite web|title=Puerto Rico adopts VAT system and broadens sales and use tax|url=https://www.pwc.com/us/en/state-local-tax/newsletters/salt-insights/assets/pwc-puerto-rico-adopts-vat-tax-system-broadens-sales-use-tax.pdf|publisher=PricewaterhouseCoopers|access-date=9 February 2016|date=26 June 2015}}</ref><ref name="Forbes: PR first US VAT"/> In doing so, Puerto Rico will become the first US jurisdiction to adopt a value-added taxVAT.<ref name="Forbes: PR first US VAT">{{cite news|last1=Harpaz|first1=Joe|title=Puerto Rico Brings First-Ever Value-Added Tax to the U.S.|url=https://www.forbes.com/sites/joeharpaz/2015/09/17/puerto-rico-brings-first-ever-value-added-tax-to-the-u-s/#1586ac30201d|access-date=9 February 2016|work=Forbes|date=17 September 2015}}</ref><ref name="BBNA: PR first US VAT">{{cite news|title=Examining Puerto Rico Tax Regime Changes: Addition of Value Added Tax and Amendments to Sales and Use, Income Taxes|url=http://www.bna.com/examining-puerto-rico-n57982066022/|access-date=9 February 2016|work=Bloomberg BNA|date=11 January 2016|quote=Puerto Rico's adoption of a VAT represents a major shift in tax policy and renders the Commonwealth as the first U.S. jurisdiction to adopt this tax regime.}}</ref> However, two states have previously enacted a form of VAT as a form of business tax in lieu of a business income tax, rather than a replacement for a sales and use tax.
The state of [[Michigan]] used a form of VAT known as the "Single Business Tax" (SBT) as its form of general business taxation. It is the only state in the United States to have used a VAT. When it was adopted in 1975, it replaced seven business taxes, including a [[corporate income tax]]. On 9 August 2006, the Michigan Legislature approved voter-initiated legislation to repeal the Single Business Tax, which was replaced by the Michigan Business Tax on 1 January 2008.<ref>[http://www.crcmich.org/TaxOutline/TaxOutline.pdf Outline of the Michigan Tax System], Citizens Research Council of Michigan, ''January 2011'' {{webarchive |url=https://web.archive.org/web/20141205140805/http://www.crcmich.org/TaxOutline/TaxOutline.pdf |date=5 December 2014 }}</ref>
===Vietnam===
Value-added tax (VAT) in Vietnam is a broadly based consumption tax assessed on the value added to goods and services arising through the process of production, circulation, and consumption. It is an indirect tax in Vietnam on domestic consumption applied nationwide rather than at different levels such as state, provincial or local taxes. It is a multi-stage tax which is collected at every stage of the production and distribution chain and passed on to the final customer. It is applicable to the majority of goods and services bought and sold for use in the country. Goods that are sold for export and services that are sold to customers abroad are normally not subject to VAT.{{citation needed|date=June 2014}}
All organizations and individuals producing and trading VAT taxable goods and services in Vietnam have to pay VAT, regardless of whether they have Vietnam-based resident establishments or not.
| {{Flagu|China}}<ref group="lower-alpha" name="fn3">These taxes do not apply in Hong Kong and [[Macau]], which are [[public finance|financially]] independent as [[Special Administrative Region of the People's Republic of China|special administrative regions]].</ref>
| 13%
| 9% for foods, printed matter, and households fuels; 6% for service; or 3% for non-value-added taxVAT
| 增值税 (zēng zhí shuì)
|-
|-
|}
==Criticisms==
▲[[File:Campaña nomasiva.com 049.jpg|thumb|4 May 2010 "Campaña no más IVA" in Spain]]
▲The "value-added tax" has been criticized as the burden of it falls on personal end-consumers of products. Some critics consider it to be a [[regressive tax]], meaning that the poor pay more, as a percentage of their income, than the rich.<ref name="auto">{{cite web |title=Options for Reducing the Deficit: 2019 to 2028 |url=https://www.cbo.gov/budget-options/2018/54820 |publisher=Congressional Budget Office |access-date=1 March 2020 |date=13 December 2018}}</ref> Defenders argue that relating taxation levels to income is an arbitrary standard, and that the value-added tax is in fact a [[proportional tax]]; an [[OECD]] study found that it could be slightly progressive—but still have significant equity implications for the poor—as people with higher income pay more as they consume more.<ref name=oecd>{{cite report | title=OECD Taxation Working Papers: Reassessing the regressivity of the VAT| series=OECD Taxation Working Papers | year=2022 | publisher=Organisation for Economic Co-Operation and Development (OECD) | issn=2223-5558 | doi=10.1787/22235558|doi-access=free| url=https://www.oecd-ilibrary.org/deliver/4a494083-en.pdf?itemId=%2Fcontent%2Fpaper%2F4a494083-en&mimeType=pdf }}</ref><ref>{{Cite web |title=Contrary to Popular Belief, Value-Added Taxes Found to Be Slightly Progressive |last=Enache |first=Cristina |work=Tax Foundation|date = 13 August 2020 |url= https://taxfoundation.org/value-added-tax-vat-progressive/}}</ref> The effective regressiveness of a VAT system can also be affected when different classes of goods are taxed at different rates.<ref name="auto"/> Some countries implementing a VAT have reduced income tax on lower income-earners as well as instituted direct transfer payments to lower-income groups, resulting in lowering tax burdens on the poor.<ref>Chia-Tern Huey Min (October 2004) [https://web.archive.org/web/20071129192831/http://adb.org/Documents/Events/2004/Fourteenth-Tax-Conference/text-chia.pdf GST in Singapore: Policy Rationale, Implementation Strategy & Technical Design], Singapore Ministry of Finance.</ref>
▲Revenues from a value-added tax are frequently lower than expected because they are difficult and costly to administer and collect.{{Citation needed|date=November 2017}} In many countries, however, where collection of personal income taxes and corporate profit taxes has been historically weak, VAT collection has been more successful than other types of taxes. VAT has become more important in many jurisdictions as tariff levels have fallen worldwide due to trade liberalization, as VAT has essentially replaced lost tariff revenues. Whether the costs and distortions of value-added taxes are lower than the economic inefficiencies and enforcement issues (e.g. smuggling) from high import tariffs is debated, but theory suggests value-added taxes are far more efficient.{{citation needed|date=September 2017}}
▲Certain industries (small-scale services, for example) tend to have more VAT [[Tax avoidance|avoidance]], particularly where cash transactions predominate, and VAT may be criticized for encouraging this.{{Citation needed|date=November 2017}} From the perspective of government, however, VAT may be preferable because it captures at least some of the value added. For example, a building contractor may offer to provide services ''for cash'' (i.e. without a receipt, and without VAT) to a homeowner, who usually cannot claim input VAT back. The homeowner will thus bear lower costs and the building contractor may be able to avoid other taxes (profit or payroll taxes) {{citation needed|date=May 2018}}. Another avenue of criticism of implementing a VAT is that the increased tax passed to the consumer will increase the ultimate price paid by the consumer.
▲The incidence of VAT may not fall entirely on consumers as traders tend to absorb VAT so as to maintain volumes of sales. Conversely, not all cuts in VAT are passed on in lower prices. VAT consequently leads to a deadweight loss if cutting prices pushes a business below the margin of profitability. The effect can be seen when VAT is cut or abolished. When VAT on restaurant meals in Sweden was reduced from 25% to 12.5%, 11,000 additional jobs were created.<ref>{{Cite web |title=Rätt lagat? Effekter av sänkt moms på restaurang- och cateringtjänster i Sverige |url=https://www.nationalekonomi.se/sites/default/files/2016/09/44-5-bfjmst.pdf |access-date=5 October 2023 |website=www.nationalekonomi.se}}</ref>
===Risk of fraud criticism===
VAT offers distinctive opportunities for evasion and fraud, especially through abuse of the credit and refund mechanism.<ref>{{cite web |url=https://ifs.org.uk/mirrleesreview/dimensions/ch4.pdf |title=Value Added Tax and Excises
|first1=Ian|last1=Crawford|first2=Michael|last2=Keen|first3=Stephen|last3=Smith |website=[[Institute for Fiscal Studies]]}}</ref> VAT overclaim is a risk for the state due to fraudulent claims for input repayment by registered traders and [[Missing trader fraud|carousel fraud]]. There is leads to a VAT gap which can be up to 34% (in the case of Romania).<ref>{{cite web | url=https://ec.europa.eu/taxation_customs/vat-gap_en | title=VAT Gap }}</ref>
▲Because VAT is included in the price index to which state benefits such as pensions and welfare payments are linked, as well as public sector pay, some of the apparent revenue is churned i.e. taxpayers have to be given the money to pay the tax with, resulting in zero net revenue.<ref>{{cite web | url=https://www.landvaluetax.org/taxation/the-dead-loss-of-vat | title=The dead loss of VAT | Taxation | Current affairs | Comment }}</ref>
===Cashflow impacts===
Multiple VAT charges over the supply chain give rise to cashflow problems due to refund delays from the tax administration.<ref name="PWC"/>
▲Compliance costs for VAT are a heavy burden on business.<ref>{{Cite web |title=The impact of VAT compliance on business |url=https://www.pwc.com/gx/en/tax/pdf/impact-of-vat.pdf |access-date=2022-05-30 |website=PricewaterhouseCoopers}}</ref> In the UK, compliance costs for VAT have been estimated by Professor Cedric Sandford to be about 4% of the yield, though the figure is higher for smaller businesses.<ref>{{Cite web |title=VAT Software: compliance costs |last=Abolins |first=Jon |website=Accountancy Daily |date=1 May 2002 |url= https://www.accountancydaily.co/vat-software-compliance-costs}}</ref>
[[File:Counties_with_VAT_tax.jpeg|upright=1.8|thumb|right|National VAT act as a tariff on imports and their exports are exempt from VAT ([[Zero-rated supply|zero-rated]]).<ref name="economyincrisis.org">{{Cite web |url=http://economyincrisis.org/content/now-is-the-time-to-reform-the-income-tax-with-a-vat |title=Now is the Time to Reform the Income Tax with a VAT! | Economy in Crisis |access-date=17 March 2016 |archive-date=23 March 2016 |archive-url=https://web.archive.org/web/20160323111240/http://economyincrisis.org/content/now-is-the-time-to-reform-the-income-tax-with-a-vat |url-status=dead }}</ref>]]
Because exports are generally [[Zero-rated supply|zero-rated]] (and VAT refunded or offset against other taxes), this is often where VAT fraud occurs. In Europe, the main source of problems is called [[carousel fraud]].{{Citation needed|date=December 2007}}
▲This kind of fraud originated in the 1970s in the [[Benelux]] countries. Today, VAT fraud is a major problem in the UK.<ref>O'Grady, Sean (26 July 2007) "[https://web.archive.org/web/20081224045212/http://www.independent.co.uk/news/business/news/carousel-fraud-has-cost-uk-up-to-16316bn-458771.html Carousel fraud 'has cost UK up to £16bn']", ''The Independent''.</ref> There are also similar fraud possibilities inside a country. To avoid this, in some countries like Sweden, the major owner of a limited company is personally responsible for taxes.<ref name="economyincrisis.org"/>
▲Under a sales tax system, only businesses selling to the end-user are required to collect tax and bear the accounting cost of collecting the tax. Under VAT, manufacturers and wholesale companies also incur accounting expenses to handle the additional paperwork required for collecting VAT, increasing overhead costs and prices.
▲Many politicians and economists in the United States consider value-added taxation on US goods and VAT rebates for goods from other countries to be unfair practice. For example, the [[American Manufacturing Trade Action Coalition]] claims that any rebates or special taxes on imported goods should not be allowed by the rules of the World Trade Organisation. AMTAC claims that so-called "border tax disadvantage" is the greatest contributing factor to the $5.8 trillion US [[current account deficit]] for the decade of the 2000s, and estimated this disadvantage to US producers and service providers to be $518 billion in 2008 alone. Some US politicians, such as congressman [[Bill Pascrell]], are advocating either changing WTO rules relating to VAT or rebating VAT charged on US exporters by passing the [[Border Tax Equity Act]].<ref>{{cite web | url=http://www.amtacdc.org/Pages/Policy-Issues.aspx#VAT |title=Border Adjusted Taxation / Value Added Tax (VAT) |publisher=Amtacdc.org |access-date=30 April 2012}}</ref> A business tax rebate for exports is also proposed in the 2016 [[Republican Party (United States)|GOP]] policy paper for tax reform.<ref name="Marc A. Thiessen">{{cite news| last=Thiessen |first=Marc A. | title=Yes, Trump can make Mexico pay for the border wall. Here's how. |url=https://www.washingtonpost.com/opinions/yes-trump-can-make-mexico-pay-for-the-border-wall-heres-how/2017/01/17/7edf7872-dcbf-11e6-ad42-f3375f271c9c_story.html |access-date=17 January 2017 |newspaper=The Washington Post |date=17 January 2017}}</ref><ref name="GOP Tax Reform 2016"/> The assertion that this "border adjustment" would be compatible with the rules of the WTO is controversial; it was alleged that the proposed tax would favour domestically produced goods as they would be taxed less than imports, to a degree varying across sectors. For example, the wage component of the cost of domestically produced goods would not be taxed.<ref>{{cite news|last1=Freund|first1=Caroline|author-link1=Caroline Freund|title=Trump Is Right: 'Border Adjustment' Tax Is Complicated| url=https://www.bloomberg.com/view/articles/2017-01-18/trump-is-right-border-adjustment-tax-is-complicated|access-date=19 January 2017|work=BloombergView|publisher=Bloomberg LP|date=18 January 2017}}</ref>
▲A 2021 study in the ''American Economic Journal'' found that value- added taxes are unlikely to distort trade flows.<ref>{{Cite journal|last1=Benzarti|first1=Youssef|last2=Tazhitdinova|first2=Alisa|date=2021|title=Do Value-Added Taxes Affect International Trade Flows? Evidence from 30 Years of Tax Reforms|url=http://www.nber.org/papers/w26195.pdf|journal=American Economic Journal: Economic Policy|language=en|volume=13|issue=4|pages=469–489|doi=10.1257/pol.20190492|s2cid=240240194|issn=1945-7731}}</ref>
==See also==
| 