Understanding Indirect Tax: Role of Tax Professionals and Differences from Direct Tax

• Indirect tax is a tax passed off by the government on goods and services.
• It is collected by manufacturers or sellers from consumers and then paid to the government.
• Indirect taxes are often already embedded in the prices of goods and services.
• They are considered regressive and are not refundable.
• Examples of indirect tax include sales and services taxes, custom and excise duties, and activity-based taxes.
• Value-added tax (VAT) is the most common type of indirect tax globally.
• Goods and services tax (GST) is another consumption tax that replaces multiple indirect taxes.
• Sales tax is applied at the final point of sale and can be applied at multiple levels of jurisdiction.
• Indirect tax software is available to assist accountants in determination and compliance.

Source: tax.thomsonreuters.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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