Input VAT

VAT paid on purchases used for business activities.

Definition

Input VAT is the tax a business pays when purchasing goods or services for its operations. It can typically be deducted from output VAT to determine the net amount payable to tax authorities. Proper record-keeping of input VAT is essential for accurate VAT returns.

Related Terms

VAT (Value Added Tax)

A consumption tax levied at each stage of the supply chain.

Output VAT

VAT charged on sales to customers.

VAT Return

A periodic declaration of VAT collected and paid.

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