VAT vs. Sales Tax: Surprising Similarities You Need to Know

As businesses operate in a global market, it is essential to understand the various tax systems that can impact their operations. While the United States applies a sales and use tax system, Value Added Tax (VAT) or Goods and Services Tax (GST), as it is called in some countries, is a popular form of indirect taxation that exists in over 170 countries. Our previous article discussed the key differences between these two indirect tax systems.

• Both VAT and Sales Tax are consumption taxes, usually collected by businesses
• Concepts of VAT Registration Thresholds and Sales Tax Nexus
  • Value Added Tax
  • Sales Tax
• Consumer Use Tax – The Reverse Charge Mechanism of Sales Tax?
  • Value Added Tax
  • Sales Tax
• Exemptions in VAT and Sales Tax
  • Value Added Tax
  • Sales Tax
• Deemed supplier rules for marketplaces in VAT vs. Marketplace facilitator rules in Sales Tax
  • Value Added Tax
  • Sales Tax
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Source: Fonoa

 

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