Okuzeka
Accounting & Tax vocabulary · VAT & Indirect Tax

VAT

Meaning in accounting & tax, with examples

/ˌviː eɪ ˈtiː/abbreviationCore term

In accounting & tax, VAT means: Value added tax: a tax on the sale of most goods and services, collected at each stage of the supply chain and finally paid by the end consumer.

In Turkish: KDV, katma değer vergisi

How it is used

Businesses charge VAT on sales, reclaim VAT on purchases and pay the difference to the tax authority. Prices are quoted including or excluding VAT. The US has no VAT; states use sales tax instead.

Example sentences

  1. All prices in the quote exclude VAT.

  2. We can reclaim the VAT on the new laptops.

Common collocations

  • charge VAT
  • reclaim VAT
  • VAT inclusive
  • plus VAT
  • VAT rate
  • input VATThe VAT a business pays on its purchases of goods and services, which it can usually deduct from the VAT it charges on its own sales.
  • output VATThe VAT a business charges its customers on sales and must pay over to the tax authority after deducting the input VAT it has paid.
  • VAT returnA periodic form a business submits to the tax authority showing output VAT on sales, input VAT on purchases and the net amount to pay or reclaim.
  • invoiceA document a seller sends to a buyer listing the goods or services supplied, the amount due, any VAT and the payment terms.
  • tax identification numberA unique number the tax authority gives to each taxpayer, used on invoices, returns and official documents to identify the person or company.

This word in other fields

The same English word can have a different meaning in another field:

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This page explains English vocabulary for learners. It is not financial advice.