noun
vat
A tax on the value added to goods and services at each stage of production or sale.
The listed price includes VAT, so you pay nothing extra.
Etymology
VAT is formed from the initials of value-added tax. The expanded name describes taxation of the additional value created at successive stages.
More examples
- The receipt shows the VAT as a separate charge.
- Businesses can often reclaim VAT paid on supplies.
- The government raises VAT on most goods and services.
Forms
VAT
Similar words
- sales tax
- Usually collected only on the final sale to consumers.
- excise tax
- Charged on particular products or activities, not value added.