Definitions for "Value Added Tax"
VAT. A consumption tax which is levied at each stage of production based on the value added to the product at that stage.
A tax which is assessed at each stage of production on the amount of value contributed at each stage to the final product.
A tax which must be charged by VAT registered businesses on goods and services which they supply. VAT is administered by HM Customs and Excise, not the Inland Revenue. Registered businesses must pay to HM Customs and Excise any VAT that they charge on their sales (outputs), but can normally deduct VAT they have paid on goods purchased for the business (inputs).
A government fee imposed each time a product changes hands.
Keywords:  inputs, output, difference, based, over
It is based on the difference between the value of the output over the value of the inputs used.