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User_gary Posted 16 years ago
Vocabulary
Multi-point tax, set-off
As VAT is a multi-point tax with set-off for tax paid on purchases, it prevents repeated taxation of the same product.
Simple and Transparent – In the Sales tax system the amount of tax levied on the goods at all stages is not known. However, in VAT, the amount of tax would be known at each and every stage of goods sale or purchase.
Top answer
"multi-point" means that it is applied at multiple stages during the production, distribution and sale of goods -- every time something passes from one person or company to the next. "set-off" means that tax paid on purchases is subtracted from tax due on sales, so you effectively only pay tax on the value that you have added (hence the name "Value Added Tax"). (Disclaimer: If you need to understand this for a serious financial purpose then you should get advice from a qualified professional.
- "multi-point" means that it is applied at multiple stages during the production, distribution and sale of goods -- every time something passes from one person or company to the next.
- "set-off" means that tax paid on purchases is subtracted from tax due on sales, so you effectively only pay tax on the value that you have added (hence the name "Value Added Tax").
- (Disclaimer: If you need to understand this for a serious financial purpose then you should get advice from a qualified professional.
- )
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1 Answers
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"multi-point" means that it is applied at multiple stages during the production, distribution and sale of goods -- every time something passes from one person or company to the next. "set-off" means that tax paid on purchases is subtracted from tax due on sales, so you effectively only pay tax on the value that you have added (hence the name "Value Added Tax").
(Disclaimer: If you need t
(Disclaimer: If you need t
0
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