Finance and accounting
VAT and GST
Sales taxes collected by businesses for the government.
Last reviewedWhat does VAT and GST mean?
Value added tax (VAT) and goods and services tax (GST) are taxes on sales that a business collects from customers and passes to the government. VAT is used in the UK, the European Union and several Gulf countries, including the UAE and Saudi Arabia; India and Singapore use GST. The US uses state and local sales taxes instead. Reported revenue excludes these taxes, so check whether a price you are given includes them.
Where does it come up in case interview prep?
- How government and non-profits work: money, services and the value chainLesson in Government, public sector and non-profits
- How consumer goods companies make moneyLesson in Consumer packaged goods (FMCG)
- Car economics, electric vehicles and the automotive supply chainLesson in Automotive and electric vehicles
Related terms
- RevenueMoney earned from sales, before costs.
- ProfitThe money left over after costs. Revenue minus cost.
- CostWhat it takes to make and sell the product in a period.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.
- Semi-variable costA cost with a fixed part and a part that moves with volume.
- Step costA cost that is flat over a range, then jumps.
- Marginal costThe extra cost of making one more unit.