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Kontiki
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Canada
Aug 2001 time: 00:19
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quote: Originally posted by chegitz guevara
How do VATs work? |
VAT = Value Added Tax. Very simplistically meaning that at every stage of production, a tax is levied. By the time the product gets to market, it's got a hefty tax built into the price. It's a behind the scenes tax, so you generally don't notice it like you would a sales tax. The issue with imports is that you import a finished product, so that tax at each stage doesn't exist - effectively, the product can be tax free unless you have some sort of duty or sales tax in place.
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Last Conformist
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of Calakmul
Jul 2003 time: 06:19
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quote: Originally posted by chegitz guevara
How do VATs work? |
I'm no economist, but the basic idea is when you sell something, you pay 25% of the pretax price in VAT. Then you get back the VAT paid on the stuff you paid on the stuff you bought to make the thing. Net, you pay 25% of the added value that you inflicted on the product.
From the consumers perspective, it means everything gets 25% more expensive.
There are some exceptions; houses, financial services, rents, healthcare, and a few more things. Yeah, and books, because the state thinks a reading citizen is a good citizen; I have my doubts on that one, but since I buy more books than most people, I don't complain. There's a lower rate for foodstuffs - 12% I think.
And of course there's the "grey economy"; if you sell your old computer to your friend for a hundred bucks, it's not like you're gonna pay any VAT. I do not know where the exact limits of legality go here.
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Kontiki
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Canada
Aug 2001 time: 00:19
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quote: Originally posted by Last Conformist
Depends. Herearounds, at least, sellers of relatively expensive things like home electronics (TV sets, computers, etc) like to state the pretax price, which means you notice the extra dozens or hundreds of bucks you have to pay in VAT alot. |
I don't doubt you, but that seems kind of silly. If you're going to do that, then you might as well call it a sales tax and be done with it.
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Last Conformist
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of Calakmul
Jul 2003 time: 06:19
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quote: Originally posted by Kontiki
I don't doubt you, but that seems kind of silly. If you're going to do that, then you might as well call it a sales tax and be done with it. |
Well, except that no-one here has heard of a sales tax, while everybody knowns what VAT is (well, the Swedish abbreviation is moms, but same difference).
This thread has left me unclear whether there's supposed to be a differences between a VAT and a sales tax; I thought not, but some comments here made it sound it's not.
Anyway, the idea behind stating the pretax price is, I believe, psychological - a lower number on the goodie gives a more positive first impression, which, so the seller hopes, will influence later conscious decisions based on the de facto (posttax) price.
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Kidicious
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Diety of Kidiverse
Mar 2003 time: 21:19
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quote: Originally posted by Last Conformist
Well, except that no-one here has heard of a sales tax, while everybody knowns what VAT is (well, the Swedish abbreviation is moms, but same difference).
This thread has left me unclear whether there's supposed to be a differences between a VAT and a sales tax; I thought not, but some comments here made it sound it's not.
Anyway, the idea behind stating the pretax price is, I believe, psychological - a lower number on the goodie gives a more positive first impression, which, so the seller hopes, will influence later conscious decisions based on the de facto (posttax) price. |
I've seen gas stations here that give the pre-gas tax price of gas here, but it's not on the big sign. It's in small letters on the pumps. It's a political thing.
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