Who says it disadvantage US companies? VATs are paid by consumers when they buy ANYTHING, regardless of the product supplied by US or EU companies, unless there is special exemptions to the PRODUCT, not the COMPANY.
The EU’s Value Added Tax (VAT) makes things tricky for US companies because it’s a consumption tax applied at every stage of production and sale in Europe. EU companies get VAT refunds when they export goods, making their products cheaper abroad. But US companies, which don’t have a VAT system, don’t get this kind of refund when selling to Europe—so their products can end up more expensive compared to local competitors. It’s not an outright tariff, but it kind of acts like one in practice.
It does not, VAT is added regardless of whether the product was made in the US or domestically. Most countries have different VAT rates for luxury products, services and necessities, but again it’s the same regardless of where the product was made.
Also, there is no EU VAT, each country has its own VAT rates.
It doesn’t. It’s a sales tax, just like any other sales tax, paid by the consumers on all goods and services regardless of the origin. This administration makes up fake excuses and hopes its domestic audience won’t notice.
How it can be abused to function as a form of tariff is a bit beyond the scope of an ELI5, but it involves not applying it neutrally. Basically saying “My cakes have a 20% VAT, your cakes have a 30% VAT.”, or collecting disproportionate fees for “Assessing the value of your cakes.”
VAT is the same as the US sales taxes (+state/county/city taxes on top). It is applied to the final consumer, on all products regardless where they are produced in the world. (VAT may be paid by middle-man companies but they get reimbursed).
Pointing to VAT saying that it disadvantages US companies is yet another made up lie.
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It doesn’t.
It is imposed equally on sales of goods regardless of source.
Who says it disadvantage US companies? VATs are paid by consumers when they buy ANYTHING, regardless of the product supplied by US or EU companies, unless there is special exemptions to the PRODUCT, not the COMPANY.
The EU’s Value Added Tax (VAT) makes things tricky for US companies because it’s a consumption tax applied at every stage of production and sale in Europe. EU companies get VAT refunds when they export goods, making their products cheaper abroad. But US companies, which don’t have a VAT system, don’t get this kind of refund when selling to Europe—so their products can end up more expensive compared to local competitors. It’s not an outright tariff, but it kind of acts like one in practice.
It Doesn’t, a VAT/GST (typically between 10~20%) is applied equity to all local sales, and to every company,
It does not, VAT is added regardless of whether the product was made in the US or domestically. Most countries have different VAT rates for luxury products, services and necessities, but again it’s the same regardless of where the product was made.
Also, there is no EU VAT, each country has its own VAT rates.
It doesn’t. It’s a sales tax, just like any other sales tax, paid by the consumers on all goods and services regardless of the origin. This administration makes up fake excuses and hopes its domestic audience won’t notice.
It doesn’t.
VAT applies to all products equally regardless of where they were made.
So it doesn’t disadvantage a particular country or producer.
A widget made in the US will have 20% tax on it and a widget made in Germany or Spain or China or Uganda will also have 20% VAT on it.
It _can_ be, but it’s almost never.
How it can be abused to function as a form of tariff is a bit beyond the scope of an ELI5, but it involves not applying it neutrally. Basically saying “My cakes have a 20% VAT, your cakes have a 30% VAT.”, or collecting disproportionate fees for “Assessing the value of your cakes.”
VAT is the same as the US sales taxes (+state/county/city taxes on top). It is applied to the final consumer, on all products regardless where they are produced in the world. (VAT may be paid by middle-man companies but they get reimbursed).
Pointing to VAT saying that it disadvantages US companies is yet another made up lie.
It doesn’t.
The fact that someone calls something a reciprocal action doesn’t make it true.