Talk:Value-added tax

VAT, gross value and net value

Could someone explain a bit the terminology about Gross Value, Net Value and VAT and how they are are related?

I believe that

Gross value being the price paid by the client. Net value the money received by the supplier. and VAT is the difference going to the tax office.

Gross Value = Net Value + VAT

Am I right?

It sounds simple but we many reader are not native English speakers. —Preceding unsigned comment added by 64.48.59.4 (talk • contribs) 09:42, 20 July 2006

Should this be someone or something

Because the price for someone rises, the quantity of goods traded decreases

Yes I agree this is a very minor point. —Preceding unsigned comment added by 82.152.196.122 (talk • contribs) 18:15, 15 July 2006

Cleanup

I don't understand the point of two banners. Nothing has been added to the talk to clarify the addition of either banner. Morphh ^(talk) 1:03, 18 April 2007 (UTC)

Disputed

(See the section below, Rules on pricing within the EU; if clicking on that link doesn't lead to the respective section, it means that section has been archived either here or here.)—Preceding unsigned comment added by Gutza (talk • contribs) 18:27, 7 July 2007

fixed now! —Preceding unsigned comment added by 194.46.232.120 (talk • contribs) 20:09, 27 July 2007

Indonesia GST

I've seen it written elsewhere that Indonesia has a 10% GST. Can anyone confirm this and if so, add it to the list —Preceding unsigned comment added by Starstylers (talk • contribs) 10:27, 15 July 2008

China Section is a bit of a mess

Does anyone else think that the China section is a mess? It's unencyclopedic and doesn't really make sense. air12345 (talk) 13:20, 26 January 2012

Suggestion on a section

The following sentence in the early section of the article is very ambiguous :

"VAT proposes to replace sales tax which in most developing countries trying to shift to some variant of VAT, like India, is the 'only' major revenue source for the regional governments since low per capita income and unemployment render income tax inadequate as a revenue source."

What is the only major revenue source? Is it VAT or is it Sales Tax? The answer is obvious to an alert and informed reader. But we could make it a little more novice friendly. My suggestion is following:

"VAT proposes to replace sales tax. Presently, sales Tax is the 'only' major revenue source for the regional governments since low per capita income and unemployment render income tax inadequate as a revenue source in most developing countries like India, which are trying to shift to some variant of VAT." —Preceding unsigned comment added by Pranesh Bhargava (talk • contribs) 18:36, 15 January 2008

The Sum and Substance of the Following Should Be Added (sans editorializing): the Article Is Misleading Otherwise

This is, of course, all theory. In practice a retailer specializes in sales to consumers. Retailers tend to sell a large variety of products and have enough on hand for their trade until the next supply shipment comes in, but not enough on hand, for example, to sell 100,000 widgets to one customer. In another example, for clarification, a consumer cannot wander into a grocery store and make a point-of-sale purchase for 10,000 rolls of toilet paper. On the other hand, there is nothing to prevent a nonconsumer from avoiding tax at "retail" establishments that cater to both consumers and non-end-users. However the burden is on the non-end-users to provide the business license, exemption certificate, etc., necessary for exemption from sales taxes ordinarily collected by the retail establishment. A large exception to this state of affairs which is growing exponentially is online sales. Typically if the online retail firm has no "presence" in the state where the merchandise will be delivered, no obligation is imposed upon the retailer to collect sales taxes from "out-of-state" purchasers. Generally, state law requires that the purchaser report such purchases to the state taxing authority and pay the sales tax. It is fair to say that many citizens are unaware of this obligation and that states make little effort to raise that awareness or provide a reasonably easy way of complying with the obligation.

No one expects this happy state of affairs to last forever. Amazon has been targeted. so far it has responded on a case-by-case basis. Colorado has recently attempted to to require Amazon to remit sales taxes on sales by Colorado-based "affiliates." Amazon preemptively cut ties with those affiliates. Finally, it is widely believed that a value-added-tax is unlikely to be enacted in the United States because most consumers would not understand understand such a tax – it is too complicated compared to the sales tax. —Preceding unsigned comment added by 76.14.135.111 (talk) 02:28, 20 October 2010 (UTC)

Fascinating really, now do you have a reliable source you'd like to site or is this just a personal forum? Bullercruz1 (talk) 11:38, 10 December 2010 (UTC)

VAT included or excluded in retail display pricing

Which countries generally include VAT in the display pricing of consummables?

For example, most European countries include VAT in display pricing but in some countries (I'm talking here specifically about Canada with HST) do not; i.e. 'on shelf' pricing excludes HST which is subsequently added at time of payment.

It would be useful to include a column within the existing tables to show which countries include or exclude Vat in display pricing

Viridiana2 (talk) 00:23, 4 November 2010 (UTC)

I think such a column would be unnecessary, and would clutter the otherwise informative tables. At any rate, as I understand it, HST is a sales tax, which are generally not included in the "on-shelf" price; VAT is always included in the sales price as it is a tax on the value added at each stage of production. Sales tax is only levied on sales to private consumers. ConorBrady^.ie (caint) 09:29, 4 November 2010 (UTC)

Sorry ConorBrady, HST is a form of VAT. (I only mentioned HST as it is currently a political 'hot potato' here in Canada.) I take your point about extra columns cluttering the tables but I still think it would be useful to identify which countries generally include or exclude VAT in retail display pricing. —Preceding unsigned comment added by Viridiana2 (talk • contribs) 21:33, 4 November 2010 (UTC)

Excuse my comment that HST is not a value added tax. Are there any other countries that have a VAT which isn't included in the shelf price? My experience may be Euro-centric, but any VATs I've come across are always included in the shelf price. Canada is the only exception I now know of, so the current setup of there being a note in the relevant section should suffice. ConorBrady^.ie (caint) 22:20, 4 November 2010 (UTC)

Viridiana, ConorBrady

My understanding is that we have these two questions for each country that uses a consumption tax:

(Q1) TYPE OF CONSUMPTION TAX -- Is the consumption tax

(a) "VAT", or

(b) "sales tax"?

(Q2) SHELF PRICING PRACTICE: Is the consumption tax included in the shelf price?

(a) "yes", or

(b) "no"

and that

these two questions are logically independent of each other, but

presently, in countries where

the answer to Q1 is (a) VAT,

the answer to Q2 is usually (a) "yes" and

the answer to Q1 is (b) sales tax,

the answer to Q2 is usually (b) "no"

Is my understanding correct?

Mark.camp (talk) 02:17, 1 December 2010 (UTC)

@Mark.camp:

Yes, you're correct. (I like the logic table, btw!) As such, only the anomalies need be noted, IMO. ConorBrady^.ie (caint) 23:36, 5 December 2010 (UTC)

More about the history of the VAT is needed

It started in 1954, but how exactly was it introduced? How come that just like that, the masses of people around the world accepted the VAT as part of their reality? Was the VAT percentage very low at the start and then increased incrementally? The article seems to neglect or avoid these "tough" questions. John Hyams (talk) 00:29, 16 December 2010 (UTC)

"the value-added tax is in fact a proportional tax in that people with higher income pay more at the same rate that they consume more." - in the article. This of course is correct up to a point but in includes a lot of assumptions and omissions. IE If I am rich I may buy 2 sodas instead of 1, so I pay twice as much. However, I earn $100 for every $1 you earn. So if sodas cost $1 and tax is 10 cents then you pay $1.10 and I pay $2.20. Of course you had to borrow 10 cents and I have $97.80 left I my pocket that isn't taxed - sucker! You'll pay 10% tax and I'll pay 0.2% tax, you gotta love this new system. It's pretty darn close to what we have already. ( If I lent you the 10 cents at 7% for 30 years you will pay me back 30 cents - I can claim a business expense ( I hope this is in VAT and lower my "socialist tax rate" of 0.2% down to 0.195% and of course you will probably not be able to buy soda for twenty years at such a good interest rate unless dancing girls can influence you "that life is for living" - sucker!15:37, 3 February 2011 (UTC) —Preceding unsigned comment added by 159.105.80.220 (talk)

Distortionary / Economic Section

What has been written is generally true, but is also a generalisation!

In general price increases reduce demand. The demand for some goods can go up as a result of higher pricing (the snob effect) or remain equal - necessity goods.

What should be noted is Value-Added Tax is recessive, and thus is often not the best tax. Also, despite not implicitly affecting production it is a deterrent to employment and working to achieve extra money as with the application of tax on goods purchased it removes the incentive to some degree of people working as they are able to purchase less with money earned.

If someone has the time these points should be made, or the comment of the author of this section counterbalanced. Or the use of 'generally' inserted afore a number of statements.

Lastly, I work in the field but the author hasn't really defined what they mean by distortionary - jargon used by the likes of the IMF. Gavin AD (talk) 14:33, 13 May 2011 (UTC)

History of VAT

I believe that the first historical mention of VAT, was in fact in France in a novel by Balzac, called "The employees" or "the superior woman" (litteral transalation...). In this novel published in 1883, one of the main characters, if ot the main one, Xavier Rabourdin, pursues a life long "invention" which consists of taxig consumption rather than income, under the idea that it would reduce taxation levels on the individuals and yet increase return for the administration. — Preceding unsigned comment added by 147.67.18.5 (talk) 08:33, 12 October 2011 (UTC)

In the German article it is said that a VAT has been established nationwide in 1902 (and earlier, e.g. in Bremen 1863, and even before the proposal by Siemens's mentioned in thsi article), and was also used in ancient Rome. So Lauré can't have "invented it".--Mideal (talk) 11:48, 10 November 2011 (UTC)

A List of countries and territories without VAT would help assess its global extent

It would add fuel to the case of the scepticals about VAT efficiency as the list enjoy descent economic prospects in a context of global economic crisis.

It could be a standard country table that don't need to be sortable if grouped by independant or territory criteria.

Then I feel one table would be easier to handle than the three we actually have, provide it is initially sorted by regions e.g. Africa, Asia, Meeddle-East, Europe, America and Pacific with all the countries and territories of the world. The no VAT countries will have simply zero on rate columns. It would need one more column to include the region for enhanced sorting purpose. By the way incorporating the fifty or so countries that are missing in the non-EU table. Might do it next week if there is no objection.

Galafron (talk) 03:57, 4 November 2011 (UTC)

State Sales Tax vs. State VAT and online sales?

At the end of the sales tax example the article states that online sellers without a presence in a state don't pay the state sales tax. Why is this only listed under the state sales tax example and not the VAT example? How would this be different in a VAT situation? If I'm a manufacturer in No-tax-state, selling online and a consumer buys my widget for $1 from VAT-tax-state why would I, as a manufacturer, be required to collect VAT? Why would a VAT change the consumer's actions after buying my widget? I don't see why this is called out in the sales tax example but not the VAT example. (Of course, this is assuming a situation where the US states switch from a straight sales tax to a VAT, so separation of state jurisdiction and lack of interoperability at least equivalent to the current level is assumed. I don't know the state of affairs in other countries and whether sales tax dodging through online purchases happens there or not.) 207.190.221.98 (talk) 21:23, 11 November 2011 (UTC)