Larry wrote:
BrianH wrote in news:829ed$47db6af5$5449e348$1574
@news.hispeed.ch:

Each registered business does indeed pay VAT on its stage of
a product's path to final sale to the consumer but each
business is able to claim that payment back once it leaves
for the next stage, so in practice no payment is made.
Therefore, that payment is not reflected in the product's
cost of production, only the consumer pays the final VAT,
making it similar to a normal sales tax.


I learn something new every day. This is today's discovery. I didn't know
they get it back. I assumed, wrongly it seems, that it was accumulated.

It certainly wouldn't be given back in the United States of America. We'd
invent a new layer of local government bureaucrats who would live quite
well upon each layer of kept VAT, here.

Does VAT work that way in every European country, or just Switzerland?

Oh dear Larry, this is why I didn't want to respond
initially, because I am no tax expert although I do have the
basics. I had a friend in the UK who gave up his engineering
business and went off sailing when VAT was first introduced.
I remember him waving a big, thick book and saying "Here are
all the regulations and instruction how I've got to
introduce all this VAT bookkeeping - I give up." Actually, I
think it was just an excuse to retire early and take off in
his yacht.

No, the principle is European wide, only the rate varies.
Here in CH it was ca. 9% on a pair of winches I just
imported while most EU countries it is much higher, often
around 20% (CH is not in the EU).

Many products are zero-rated, such as food, children's
clothes, books, etc and other products/services have
differing percentage groups.

I remember how I used to get an irate phone call from my
company's accounts department if I ever included a hotel
bill in my expenses that I hadn't asked reception to add our
corporate VAT number with my name - it meant they couldn't
claim the expense back.
Best, BrianH.