Talk:Value-added tax

Merger proposal

Recently created articles Value Added Tax in Bangladesh and Value added taxation in Bangladesh bring to three the number of articles that cover the topic. I propose they be merged into the Bangladesh section of Value-added tax, unless the result of doing so would be a section longer than five or six paragraphs.

• Value Added Tax in Bangladesh started as a copy of the target section. It was then expanded, but with undesirable content - a few unsourced sentences and a repository of links to primary sources.
• Value added taxation in Bangladesh is sourced, which neither of the other two are, but it covers much the same ground as the target, and at no greater length.

I think that the content in the two new articles can be explained in the context of Value-added tax, and that if tightly written it would not cause any problems as far as article size or undue weight is concerned. (If it can't be kept to five or six paragraphs, or later grows beyond that size, I would have no objection to it being spun off into one new article, although for consistency the best title would use a parenthetical disambiguation: Value added tax (Bangladesh)) --Worldbruce (talk) 21:08, 29 July 2017 (UTC)

I support the merger. Snooganssnoogans (talk) 21:52, 29 July 2017 (UTC)

Support the merger, with the proviso that the Bangladesh section doesn't grow too large as per Worldbruce above. JezGrove (talk) 19:46, 7 October 2017 (UTC)

I support the merger with the prerequisites set by JezGrove Cloaker416 (talk) 04:19, 11 June 2018 (UTC)

  Y Merger complete. Klbrain (talk) 21:17, 19 January 2019 (UTC)

"Approximately 193 countries..." ??

Quote from article "166 of the world's approximately 193 countries employ a VAT,..." - I just wonder how 193 can be approximateted (the numbers of countries has to be an integer). Guess I understand the reason for this formulation, but still strongly suggest a rephrasing. Boeing720 (talk) 17:03, 8 February 2019 (UTC)

There's no universally agreed list of countries. However, 193 seems to be the number of members of the UN rather than some general approximation. I think it's better to just say that in the article. Sakkura (talk) 11:44, 9 February 2019 (UTC)

Swedish OMS

Boeing720 has twice added the old Swedish OMS (omsättningsskatt) to the table of EU VAT rates, in addition to the current MOMS (meromsättningsskatt). However, OMS was not a value-added tax. "Meromsättning" (added revenue) means essentially the same as value-added, but OMS omits the "added" part - it was a plain sales tax.

Many other countries had a similar progression from sales tax to VAT; Denmark even used practically the same words, and exactly the same contractions, apart from not capitalizing "oms" and "moms." I don't think these non-VAT taxes should be listed in the table of European VATs. Sakkura (talk) 23:09, 9 February 2019 (UTC)

Sakkura As you are Danish, I'm certain you could read the source I added. There was a OMS during World War II, I don't refer to that - but the OMS that was introduced in 1959. The only difference compared to MOMS is so little that one very well can state OMS was the very first VAT in Sweden and OMS predates MOMS. To the final consumer of no difference whatsoever. The abbreviation MOMS (as of imposing 1969) = mervärdes och omsättningsskatt. (litteral translation of the first part "more value's" (genitive) whilst the last part means "revenue tax", or "revenue taxation". Such abbreviations are next to always capitalized. In Denmark too (Og hvad med SKAT ?) - no one writes or spells Scandinavian Airlines (Scandinavian Airline System) as anything else than SAS , pronounced "sass". Although I'm very familiar with the Greater Copenhagen Area - and more, I would say Copenhagen is my Capital City, but I've never thought of oms/moms there, and haven't comment on that. I just think it is somewhat interesting trivia. Boeing720 (talk) 03:58, 10 February 2019 (UTC)

And just by the way, during a few years in the early 70's (halvfjerdserne) I remember the MOMS was higher on Sundays (!). Boeing720 (talk) 04:03, 10 February 2019 (UTC)

The only difference compared to MOMS is that OMS was not a value-added tax, it was a sales tax. That's specifically why it should not be in this article, except perhaps for mention as a non-VAT forerunner to the present VAT (the problem with that approach is you'd have to make such mentions for lots of other countries). It would be more at home in the articles on sales tax and consumption tax. As for your source, it's paywalled. As for the spelling in Danish, moms is lower-caps according to SKAT (tax agency) and Dansk Sprognævn (the Danish language council). Sakkura (talk) 11:11, 10 February 2019 (UTC)

If only Wikimedia coukd be more flexible, I could have shown you "Pris 6:85 inkl. OMS" or "Pris 4:95 inkl. MOMS". It was capitalized for many decades. Whats the actual difference, both OMS and MOMS is only paid by the end-user, in the end. It's not wrong to say MOMS is OMS with more bureaucracy within each step of selling & developing. Boeing720 (talk) 23:41, 12 February 2019 (UTC)

Please also read this [1] In Swedish, with forgotten capitalization, but still. Boeing720 (talk) 23:45, 12 February 2019 (UTC)

The actual difference is that with a VAT, the value added in each stage of production etc. is taxed. With a sales tax, only the final price at one stage is taxed. This has a different economic and administrative impact. The available sources clearly establish that OMS was a sales tax. Sakkura (talk) 23:44, 13 February 2019 (UTC)

Saudi Arabia VAT

in the map it says that Saudi Arabia has no VAT which is incorrect. Saudi Arabia has had a 5 percent VAT for a couple of years and now it has a 15 percent VAT. Map needs updating. Unfortunately I don't know how to do that. Source: https://english.alarabiya.net/en/features/2020/06/29/Saudi-Arabia-VAT-triples-to-15-percent-on-July-1-Here-s-everything-you-need-to-know Rayansb (talk) 19:33, 30 June 2020 (UTC)

EU VAT list

Hi, quick note on the EU VAT list, why is it separated from the rest of the world especially when an article about EU VAT already exists, European Union value added tax. I think we should at least have a single table on this article, or possibly an article with a list of VAT, GST and sales tax that would be more organised and easy to understand. Also, I'm thinking of proposing a request to split List of countries by tax rates to seperate lists that discuss each tax on its own as I don't see a point in having a table that is very messy and difficult to read. Notes on any point are more than welcome :). Vyvagaba (talk) 14:46, 5 February 2022 (UTC)

India VAT to GST and Estonia VAT increase to 22%

Since 1st July 2017, the VAT in India has been called GST (Goods and services tax), and the rates vary from 5 to 28% with the majority of products at 18%.

In the document, the local name of the tax is still mentioned as VAT.

Ramtin.abadi (talk) 06:33, 25 January 2024 (UTC)

Starting from 1 Jan 2024, the VAT rate of Estonia has increased to 22%

In the document, the VAT rate is stated as 20%

Ramtin.abadi (talk) 06:44, 25 January 2024 (UTC)

 Not done: it's not clear what changes you want to be made. Please mention the specific changes in a "change X to Y" format and provide a reliable source if appropriate. Pinchme123 (talk) 03:31, 7 February 2024 (UTC)

References

Semi-protected edit request on 17 March 2024

In the ‘Examples’ sections under the subheading ‘With a value-added tax’, the following clause needs to be deleted in its entirety: “but only by successfully selling the value-added product to the buyer or consumer in the next stage. In the previously shown examples, if the retailer fails to sell some of its inventory, it suffers a greater financial loss in the VAT scheme, in comparison to the sales tax regulatory system, by having paid a higher wholesale price on the product it wants to sell.”

The above is factually inaccurate in basically all jurisdictions with a VAT or GST tax. A business is able to claim a purchase/input tax credit on its VAT return regardless of whether it is successful in selling the inventory created from whatever input it was charged tax on in the previous production stage. There is no way of even knowing what exact inputs relate to what exact outputs and a valid tax invoice is generally sufficient for a business to substantiate its claim, and request for refund of, if applicable, a purchase/input tax credit on its VAT return. 2601:681:8A01:2E40:393B:C20:205B:F437 (talk) 10:13, 17 March 2024 (UTC)

 Not done: The page's protection level has changed since this request was placed. You should now be able to edit the page yourself. If you still seem to be unable to, please reopen the request with further details. RudolfRed (talk) 18:53, 11 April 2024 (UTC)

Subjectivist POV

This article appears to have some serious subjectivist/marginalist POV, which is poorly cited to boot. For example it simply presents supply/demand curves as if these were actually existing things. It presupposes a general equilibrium. It suggests there exists such a thing as "consumer surplus". I would at the very least expect this POV to be clearly marked ("The neoclassical school of economics argues that ..."). Within classical political economy none of these things exist. KetchupSalt (talk) 12:58, 9 May 2024 (UTC)

Products excluded from VAT

products excluded from VAT Esonasiphiwo (talk) 18:47, 27 May 2024 (UTC)

Contradiction in comparison to Sales Tax

In the "Comparison with sales tax" section the article says:

By contrast, sales taxes are collected on each transaction, encouraging businesses to vertically integrate to reduce the number of transactions and thereby reduce the amount of tax.

Later, in the example, the sales tax is not levied except to the final consumer:

The retailers pay no tax directly

I think the latter is correct, and the former comparison is wrong, but I'm not sure enough to make the edit. Is it different in different jurisdictions? I've heard the "vertical integration" argument before. Are there cases where it applies?

I feel like this comparison is an important part of this page, so we should get it right. Lkesteloot (talk) 21:58, 9 December 2024 (UTC)

Who pays the tax

The text says 'VAT is an indirect tax, because the consumer who ultimately bears the burden of the tax is not the entity that pays it.' But the consumer always is the one that pays the tax. Retailers act as tax-collectors: they do not pay the tax but collect the tax from the consumer and pass it on to the state. You can say it is collected indirectly, but it is paid directly. 213.73.220.232 (talk) 14:41, 10 April 2025 (UTC)

Trade criticism

The whole section "trade criticism" should be reworked. A lot of the stuff that is stated there, is just not true. For example the graphic on the left states "National VAT act as a tariff on imports and their exports are exempt from VAT". As source for this claim the website "https://web.archive.org/web/20160323111240/http://economyincrisis.org/content/now-is-the-time-to-reform-the-income-tax-with-a-vat". First of all, that source does not exist anymore, second of all, that is just a private website that is an opinion at best, not a reliable source of any kind. But the main point is, that this claim is just plainly wrong. A VAT does not act as a tariff on imports. I can speak only for how VAT in Europe works, but the VAT is tax applied to any product when sold. Regardless of if it is imported or not. Anyone has to pay VAT, including any domestic company or producer.

So for example: Lets say you have two BMW cars, exactly the same model, one is produced in the US in Spartanburg, South Carolina, and the other is produced in Germany. Assume, both cars are produced with the same cost, so lets say it costs BMW 50.000 USD to produce the car in the US as well as in Germany. Lets also assume, that no tariff exists for car imports into the EU or into the US, so any price disadvantage can therefore by definition not be the result of any tariff rate. At last we assume, that BMW wants to make a profit of 10.000 USD on the car, so the car should therefor be sold for 60.000 USD (pre any taxes/tariffs).

If the car that is produced in Germany is then sold in Germany to a domestic customer, VAT of 19% would be applied, so the car's price for the car would have to be 71.400 (60.000 * 1.19). If the car manufactured in the US and then imported into the EU was sold in Germany, without VAT being applied, the US produced car would be sold for 60.000 USD, e.g. 19% cheaper that the domestically produced car. So obviously, VAT must also be applied to imported items, because otherwise only domestically products would be taxed and everything that is imported would be 19% (or whatever the VAT rate is) cheaper just by not having a VAT applied to it. So that obviously doesn't make sense and would mean any imported product would have a huge advantage over any domestic product, the higher the VAT rate would be, the higher the advantage. Instead of the act acting like a tariff, a missing VAT on imports would act like a tariff on domestic products!

Lets look also on the other direction, assume the car produced in Germany would be sold in the US. So if VAT would be applied on exported products, BMW would have to pay a VAT of 9.500 USD (19%) on the cars value (50.000 USD) on export. So to maintain that 10.000 USD profit the car would need to be sold for 69.500 USD, whereas the car produced in the US could be sold for 60.000 USD achieving the same result, so the imported car would always be in a disadvantage, the higher the VAT in Germany, the higher would be the disadvantage. If the VAT however is not applied to exported items, the car would be imported for the actual car's value of 50.000 USD into the US and could be sold there for the same value (60.000 USD) as the US produced one. So a level playing field is only reached, if VAT is not applied on exports.

Countries in Europe have by the way very different VAT rates, ranging from 8% in Switzerland to 27% in Hungary. As their are obviously no tariffs in place in the EU common market zone, VAT is applied only where the product is sold (to the rate that is in force in that country), not when anything is exported into the other country, as that would make no sense at all (because of the same reasons as stated above).

I know that President Trump made that VAT/tariff claim also, but that doesn't make it anymore true, just because the US president said so.

Best regards, Christian 2A02:3100:B068:C900:B95A:15D7:CF03:D67F (talk) 22:28, 1 August 2025 (UTC)