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	Tax Value Added Tax   Property Taxation: Depreciation Taxation of Profit Adjusted Basis Home Mortgage Interest and Points Deduction   1031 EXCHANGES Capital Gains Tax Corporate Tax Corporation Dividend Tax Double Taxation European Union Savings Taxation Homeowners exemption Foreign Investment in Real Property Tax Act. Flat Tax Principles of Income Tax Income taxes Inheritance Tax Installment Sales Poll Tax Progressive Tax Property taxes California Propositions Purposes and Effects of Taxation Retirement Tax Sales Tax Sales leaseback Tariff Tax Credit, Exemption Equivalent and Tax Tax Rates Tax Treaty Direct and Indirect Taxation Value Added Tax Value added tax or (VAT) is similar to a sales tax in the sense that it is levied at the time of the sale of goods and services. In certain countries, including Australia, Canada, New Zealand, and Singapore, this tax is known as the goods and services tax or GST; and in Japan it is known as consumption tax. VAT is hence an indirect tax, wherein the tax is collected from someone other than the person who actually bears the cost of the tax, namely the seller rather than the consumer. As VAT is intended to be a tax on consumption, in the case of exports in which by definition, the goods are consumed abroad, these are usually not subject to VAT or else, the VAT is refunded. VAT first came into being when it was invented by a French economist in 1954. Maurice Lauré, who was the then joint director of the French tax authority, the Direction générale des impôts, as taxe sur la valeur ajoutée (also known as TVA) was the first to introduce VAT with effect from 10 April 1954 for large businesses, and over time extended this to all business sectors. In France, it is the most important source of state finance, accounting for over 45% of the state's revenue. Personal end-users of products, consumers and services cannot recover VAT on purchases; however businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this manner, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by the business, rather than by the state. VAT was invented because very high sales taxes and tariffs encouraged cheating and smuggling. It has however been criticized widely on the grounds that it is a kind of regressive tax. Value Added Tax Vs Sales Tax VAT is different from a conventional sales tax in the sense that VAT is levied on every business as a fraction of the price of each taxable sale they make, but they are in turn reimbursed VAT on their purchases, so the VAT is applied to the value added to the goods at each stage of production. Sales taxes on the other hand, are normally only charged on final sales to the end consumers. However, because of reimbursement, VAT has the same overall economic effect on final prices. The main difference between them is the extra accounting required by those in the middle of the supply chain; this disadvantage of VAT is balanced by the application of the same tax to each member of the production chain regardless of its position in it and the position of its customers, thereby reducing the effort required to check and certify their status. When the VAT has few, or barely any exemptions such as with GST in New Zealand, payment of VAT is even simpler.