VAT Introduction France

About VAT Introduction France

The value added tax was invented by French economist Maurice Lauré in 1954. VAT is a consumption tax collected at each stage of production based on the value added. France was the first country to adopt VAT, replacing a cascade turnover tax. VAT spread rapidly across Europe, and the European Union adopted VAT as its consumption tax standard. Over 170 countries now use VAT, making it the most widely adopted tax innovation of the 20th century. VAT is generally considered more efficient than sales tax because it is collected at each stage rather than at the final sale. The main exception is the United States, which relies on state level sales taxes rather than a federal VAT.