logoalt Hacker News

mytailorisrich04/02/20253 repliesview on HN

VAT is not paid by companies. It is paid by consumers and collected by companies. The US have the sales tax, which is similar.

It absolutely does not make sense to count VAT as a "tariff". I am sure they know it.


Replies

arlort04/03/2025

No, VAT is actually paid by companies (and also consumers of course), it's one of the subtle differences between VAT and sales tax.

The "thought experiment" you can make is the case of something not ending up being sold. In a VAT regime the manufacturer will have already paid the VAT on the inputs but since the customer hasn't paid the VAT on the finished product the manufacturer won't get their money back on the VAT they already paid (there might be other tax rebates or write offs, but that's a different matter)

In a sales tax regime the tax is only paid by the final consumer so if the manufacturer doesn't sell the product they are not out for any additional tax

Still doesn't change that neither of those are a tariff by any definition

show 2 replies
butterknife04/03/2025

My company pays VAT surplus to government every quarter since the VAT we collect on our products and services is higher then the VAT we pay for our purchases. How are we not paying it?

show 2 replies