VAT (Value added tax)

Value added tax (VAT) is an indirect consumption tax imposed on the sale of goods and services within a country. In procurement, VAT is generally charged at the end of the purchasing process, adding to the total cost of a purchase. As it is an indirect tax, businesses are entitled to claim back any fees paid as part of VAT obligations, should they meet the necessary criteria outlined by their respective government body. By understanding how VAT works in relation to procurement, businesses can ensure that their budgeting and spending models remain compliant with all applicable taxes and legislations.