Guidance in Dealing with VAT Transactions

Within the United States, a retail sales tax is charged to the final consumers or end-users that purchase a product or service. However, in other countries, particularly those belonging to the Organization for Economic Cooperation and Development (OECD), there is a value added tax (VAT). This is a general tax applied to all commercial activities involving the production and distribution of goods and the provision of services. VAT is charged as a percentage of price and is calculated based on…