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0 pointsfsckboy8mo ago0 comments

vat is simply corporate income tax, it's a tax on "value added", i.e. profit or income. I don't know in europe whether that is on top of other corporate income tax or not.

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MattPalmer10868mo ago

VAT is not corporate income tax, and it is not levied on profit or income.

As a business, you can deduct VAT that you had to pay to others from the VAT you charged your customers, and you only pay the difference.

So the only people who end up paying are the final consumers. It is essentially cost neutral to a business - you just have to account for it properly.

UPDATE: in the UK, at least.

lenerdenator8mo ago

And they then pass that expense off to the consumer, because praise be to the shareholders.

Buttons8408mo ago

Companies can just raise prices without consequences? Is that free market competition in action?

Snark aside. I've always heard the idea was that free markets and competition would drive down prices, and that if a company was to just raise their prices, they would actually lose money because people would buy from a competitor with better prices. Turns out companies can just raise prices though. What does it mean when the things that happen in a healthy free market aren't happening?

lenerdenator8mo ago

> Companies can just raise prices without consequences?

Well, when they have a monopoly, yes, yes they can.

> Is that free market competition in action?

No.

j / k navigate · click thread line to collapse

0 comments

MattPalmer10868mo ago

VAT is not corporate income tax, and it is not levied on profit or income.

As a business, you can deduct VAT that you had to pay to others from the VAT you charged your customers, and you only pay the difference.

So the only people who end up paying are the final consumers. It is essentially cost neutral to a business - you just have to account for it properly.

UPDATE: in the UK, at least.

lenerdenator8mo ago

And they then pass that expense off to the consumer, because praise be to the shareholders.

Buttons8408mo ago

Companies can just raise prices without consequences? Is that free market competition in action?

lenerdenator8mo ago

> Companies can just raise prices without consequences?

Well, when they have a monopoly, yes, yes they can.

> Is that free market competition in action?

No.

j / k navigate · click thread line to collapse