VAT
Business & Finance abbreviation · Tax
| Stands for | Value-added tax |
|---|---|
| Categories | Business & Finance |
VAT stands for Value-added tax, a tax abbreviation.
Consumption tax collected at each stage of production and sale, in which every registered business charges tax on its sales and deducts the tax it paid on purchases, so the full burden falls on the final consumer. More than 170 countries use it, including every EU member and the UK.
Example: All prices include VAT at 20%, so the £60 jacket costs £50 before tax.
Usage notes
France introduced the first broad modern VAT in 1954, building on the work of tax official Maurice Lauré. EU law sets a minimum standard rate of 15%. The United States is the only major economy without one, relying on state retail sales taxes instead. Other languages use their own initials, such as TVA in French and IVA in Spanish and Italian.
Related abbreviations
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- UTR – Unique Taxpayer Reference
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