Value-added tax (VAT) is used most often in the European Union, but present is many countries globally. It is a type of consumption tax that is placed on the added value of a product or a service, such as a Hotel stay, a Breakfast or a Taxi journey, whenever it is sold. Businesses recover VAT paid on their purchases (Input VAT) and pay VAT on their sales (Output VAT). The final consumer is not allowed to recover its Input VAT.
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