Features of VAT
The main characteristics of VAT are:
1. It is generally levied by stages and has a wide tax base. All units and individuals engaged in the production and operation of commodities and the provision of labor services are generally levied from taxpayers in all production and circulation links of commodity appreciation.
2. The tax burden is borne by the final consumer of goods. Although VAT is levied on the business owners, the business owners transfer the tax burden to the next production and circulation link through the price when selling goods, and finally the final consumers bear the tax burden.
3. Implement the system of deduction of taxes already collected. When calculating the tax payable of the enterprise owner, the tax already borne by the goods in the previous production link shall be deducted, which is generally deducted by the purchase invoice.
4. A proportional tax rate is applied.
5. The system of tax beyond price is implemented, and the sales price does not include the VAT amount.
Value added tax is a kind of turnover tax based on the sales of goods or services and the system of deducting the tax already collected.