value-added tax

American  

noun

1. an excise tax based on the value added to a product at each stage of production or distribution: value added is arrived at by subtracting from the total value of the product at the end of each production or distibution stage the value of the goods bought at its inception. VAT

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value-added tax British  

noun

1. (in Britain) the full name for VAT

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value-added tax Cultural  

1. A tax on the value added to a product at each stage of its production, from raw materials to finished product. Widely employed in Europe, value-added taxes have the advantage (for governments) of raising revenue “invisibly,” that is, without appearing as taxes on the bill paid by the consumer.

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Etymology

Origin of value-added tax

First recorded in 1930–35

Example Sentences

Consumers must now pay a 13 percent value-added tax for contraception including condoms, after Beijing removed exemptions on the products from January 1.

From Barron's • Jan. 5, 2026

New art galleries are opening, encouraged by Italy’s recent decision to reduce value-added tax on art sales and imports from 22% to 5%, one of the lowest rates in the European Union.

From The Wall Street Journal • Oct. 4, 2025

India has driven more of the economy into the formal sector, for instance by enacting a Goods and Services Tax like Europe’s value-added tax, allowing more revenue to be extracted from more people and businesses.

From New York Times • Apr. 1, 2024

Supporters of night trains are pushing for more state help to compete against budget airlines, such as a value-added tax exemption on cross-border routes and lower track access charges.

From Reuters • Nov. 3, 2023

A value-added tax, introduced in 1999, launched the government's comprehensive tax reform program.

From The 2001 CIA World Factbook by United States. Central Intelligence Agency