What is VAT?

IVA is the abbreviation by which the Value Added Tax, it is a percentage tax that is added to the value of goods and services, as well as imports of goods Within a nation, in many countries a limit of maritime territory is also established in which the VAT of the country.

In large and small-scale trade, from raw materials to the finished product that reaches the consumer, each of the phases is taxed with the corresponding VAT, which is reflected in the final price. The final consumer will be the one who will be responsible for the cost of the total price of the products, in addition to the sum of the VAT added in each process, but will be the distributor or manufacturer who is in charge of the payment corresponding to the competent tax collection body, which will depend on the Ministry in charge of the Administration Of each country.

VAT is generalized, and has a series of common characteristics in all the countries of application:

•  VAT is a tax widespread and that it applies to all consumers in the same way, and in the same percentage.
•  Taxpayers, that is, intermediate buyers in the product manufacturing process, do not take charge of the spendings of VAT, the full payment of VAT is made by the ultimate consumer.
•  It is a tax indirect and that is found in all the processes of buying and selling of goods and services. Any purchase-sale in which there is no VAT, is defrauding the State, the fact that a seller decides to assume VAT does not imply fraud, but it will be the seller who takes charge of the payment of this tax.
•  VAT is a tax in all commercial transactions, it is very easy for the Treasury to track it through the comparison of billsHowever, especially on a large scale, this tracking is complicated in retail sales, because in many countries it is not frequent to issue invoices to customers.

VAT is a mandatory tax that must appear on all invoices, the employer is responsible for collecting it on each sale, and for the subsequent payment to the Management.