How VAT WorksValue added tax through a supply chain.Accounting & FinanceVAT through a chain.1Supplier sells at 100 + taxCharges output tax, pays it to the authority.2Manufacturer reclaims input taxRecovers the tax paid on the purchase.3Manufacturer sells at 200 + taxCharges output tax on the higher price.4Pays the differenceOutput tax less input tax — tax on the value added.5Consumer cannot reclaimThe chain ends and the full tax rests there.Educational reference. Registration thresholds, rates and exemptionsvary by jurisdiction and change frequently.How VAT Workslearnposters.com
How VAT Works — printable business wall chart from LearnPosters. Free vector PDF, US Letter and A4.

How VAT Works, step by step

VAT through a chain.

  1. Supplier sells at 100 + taxCharges output tax, pays it to the authority.
  2. Manufacturer reclaims input taxRecovers the tax paid on the purchase.
  3. Manufacturer sells at 200 + taxCharges output tax on the higher price.
  4. Pays the differenceOutput tax less input tax — tax on the value added.
  5. Consumer cannot reclaimThe chain ends and the full tax rests there.

Educational reference. Registration thresholds, rates and exemptions vary by jurisdiction and change frequently.

Questions about the How VAT Works poster

What’s on the How VAT Works poster?
5 numbered steps. VAT through a chain. Supplier sells at 100 + tax — Charges output tax, pays it to the authority.; Manufacturer reclaims input tax — Recovers the tax paid on the purchase.; Manufacturer sells at 200 + tax — Charges output tax on the higher price.; Pays the difference — Output tax less input tax — tax on the value added.; Consumer cannot reclaim — The chain ends and the full tax rests there.. Educational reference. Registration thresholds, rates and exemptions vary by jurisdiction and change frequently.
Who is the How VAT Works poster for?
How VAT Works belongs to the Accounting & Finance section rather than to a school year, because business is not something one grade owns. Anyone learning taxation can pin it up — a beginner, a student mid-course, or someone revising years later.
When should you use the How VAT Works poster?
Each business pays tax only on the value it adds. The final consumer bears the whole amount. A wall chart earns its place by being glanceable from where the work is happening, so How VAT Works belongs on the wall where that business work actually happens, within glancing distance, rather than filed away.
What other posters go with How VAT Works?
Direct & Indirect Tax, Capital Gains and Corporation Tax sit alongside How VAT Works in the Accounting & Finance section. Printed together they make a wall rather than a single sheet, which is how a reference set actually gets used.Direct & Indirect TaxCapital GainsCorporation Tax
Is the How VAT Works poster free to download and print?
Yes. How VAT Works downloads as a free PDF with no account, no email and no watermark, like everything else in the Accounting & Finance section. Print as many copies as you like for a home, a classroom, a library or a tutoring group; reselling the file is the only thing the licence rules out.Read the licence
What size does the How VAT Works poster print at?
How VAT Works is a vector PDF laid out for US Letter, and prints on A4 with Fit to page — the same file, no separate download. Because every mark on it is drawn rather than photographed, it stays sharp enlarged to A3, A2 or A1 at a copy shop. Colour carries emphasis only, so a greyscale print of How VAT Works loses nothing.Printing guide

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