Definition: VAT, or Value Added Tax, is a consumption tax placed on a product or service at each stage of production, from production to the point of sale. In the context of information technology, VAT can be applied to digital services and products such as software, cloud services, digital content, and e-commerce. The amount of VAT charged is based on the value added to the product or service at each stage of its production or distribution. The end consumer typically bears the VAT cost, while businesses collect and account for the tax, on behalf of the government. Source: EIRA team Additional information: VAT, or Value Added Tax, is a type of consumption tax that is placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. It is based on the increase in value of a product or service at each stage of production or distribution. In the context of information, VAT can be seen as a component that represents the financial obligations or costs associated with the exchange, use, or production of information. This could be in the form of taxes on digital goods or services, online subscriptions, or even the use of certain software or digital platforms. VAT is typically charged as a percentage of the total cost. For businesses, it is often a pass-through cost, meaning it is collected by the business on behalf of the government and does not impact the company's bottom line. However, it can have significant implications for pricing strategies and overall cost structures. In the digital realm, VAT can also have implications for data management and compliance. For example, businesses may need to track and report on the VAT they collect, which can require sophisticated data tracking and reporting systems. Additionally, different jurisdictions may have different VAT rates or rules, adding an additional layer of complexity. In summary, as an element of information, VAT represents a key financial component that can impact the cost, distribution, and management of digital goods and services. Example: 1. E-commerce Platforms: In the realm of e-commerce, VAT is a crucial component of information. When a customer makes a purchase, the system automatically calculates the VAT based on the product's price and the VAT rate of the customer's location. This information is then included in the invoice generated by the system. 2. Accounting Software: VAT is a key element in accounting software. The software is designed to automatically calculate VAT on sales and purchases, and to generate VAT returns. This information is crucial for businesses to comply with tax regulations and to accurately report their financial situation. 3. Point of Sale Systems: In retail businesses, VAT is applied at the point of sale. The POS system calculates the VAT on each item sold, adds it to the total price, and includes this information on the receipt. This allows both the business and the customer to see the exact amount of VAT charged. 4. Online Booking Systems: In the travel and hospitality industry, VAT is often included in the price of hotel rooms, flights, and other services. Online booking systems calculate this tax and include it in the total price displayed to the customer. This information is also included in the confirmation email or invoice sent to the customer. 5. Supply Chain Management Systems: In supply chain management, VAT is applied to the purchase of goods and services. The system calculates the VAT on each transaction and includes this information in the financial records. This helps businesses to track their VAT payments and to claim any eligible VAT refunds. 6. Invoicing Software: VAT is a crucial component of invoicing software. The software calculates the VAT on the total amount of the invoice based on the VAT rate applicable. This information is then displayed on the invoice, allowing the recipient to see the breakdown of costs, including VAT. LOST view: OV-Information Base Identifier: http://data.europa.eu/dr8/egovera/VATBusinessObject EIRA traceability: eira:InformationBusinessObject ABB name: egovera:VATBusinessObject EIRA concept: eira:ArchitectureBuildingBlock Last modification: 2023-07-27 dct:identifier: http://data.europa.eu/dr8/egovera/VATBusinessObject dct:title: VAT Information