What is the usefulness of value added?

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed. For example, when a television is built by a company in Europe, the manufacturer is charged VAT on all of the supplies it purchases to produce the television. Once the television reaches the shelf, the consumer who purchases it must pay the applicable VAT.

VAT is a tax levied on vehicle cost price difference and the selling price of goods, it is a tax on the cost of production, and we can say that the VAT is an indirect tax.VAT first appeared in 1954 in France, the suggestion of Maurice Loret who put major bases in 0.1953 where it was French the normal tax rate at the time equal to 20% with increases up to a maximum of 25% and a minimum of 6%. This has been applied to all the European Common Market countries of the VAT system as applied by Denmark in 1967, the Federal Republic of Germany in 1968 and the Netherlands in 1969, Belgium in 1971, Italy and Ireland in 1972 and England in 1973.Socialist countries also applied, such as Russia, Poland and the former Yugoslavia, the value added tax - depending on the image that copes with its financial and economic