How does a value-added tax differ from a sales tax?
A value- added tax (VAT) occurs multiply times throughout a product’s or service’s supply chain. Unlike a sales tax which is imposed on the end buyer, whenever goods or supplies change hands a tax is placed on the value added by each party at every stage of production or distribution; cost of goods sold minus sales is taxed at a certain percentages.
There are multiply counties in Asia with a VAT system in place; the percentage of the tax varies by country and region.
Countries that have VAT systems:
- China
- India
- Laos
- Philippines
- Thailand
- Vietnam
- Singapore
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