VAT is broadly a type of sales tax, the cost is borne by all end users of any given product regardless of where it is from.
That needs to be explained to people in the US who are familiar with sales taxes and do not know what a VAT is. @annajerzewska.bsky.social
Yeh, I read that tosh from 47.
FYI Americans need to learn that ‘sales tax’ has different names in other countries.
VAT is ‘Value added tax’.
NOT a tariff folks.
Since VAT is paid in every step, it might look to an i̶g̶n̶o̶r̶a̶n̶t̶ ̶o̶r̶a̶n̶g̶e̶ uninformed eye, that the VAT paid on a US->EU import is a kind of tariff when in same time the EU->US import does not pay anything. It misses that domestic EU producers have to deal with the same VAT when selling domestically.
VAT is levied at every single step of a product life cycle (albeit total rate is fixed) while sales tax only payed by retail users. And products exported will get VAT rebate (“border adjustment”).
In Australia, GST is added every step, but the tax paid on inputs is deducted from the tax collected on sales. Each system is slightly different in design across the globe. You can get a GST rebate on export here too I believe.
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That needs to be explained to people in the US who are familiar with sales taxes and do not know what a VAT is. @annajerzewska.bsky.social
FYI Americans need to learn that ‘sales tax’ has different names in other countries.
VAT is ‘Value added tax’.
NOT a tariff folks.
But Denmark belongs to the EU.