Tax basics

What is VAT?

The basic mechanism, who accounts for it and how it differs from other consumption taxes.

Value added tax is a consumption tax charged on taxable supplies and reported by businesses to the relevant authority. Its economic burden is generally intended to fall on the final consumer.

How the mechanism works

Businesses normally offset output VAT against deductible input VAT. Whether a transaction is taxable, exempt or subject to reverse charge depends on jurisdiction, place of supply, customer status and transaction type.

Why the label is not enough

Outside the EU, VAT, GST, sales tax or other indirect taxes may apply. An EU outcome must not be reused for a third country without checking local rules.

In Dynafis

Dynafis classifies the transaction from structured facts and turns missing prerequisites into warnings or manual review.