[laurentl]

Everyone pays VAT but if you’re a company you get reimbursed (by having your accountant compute all paid VAT and asking the state for a refund IIUC). VAT is only supposed to apply to the last transaction with the consumer, hence the “value added” in the tax ;)

Selling fake goods between companies and applying for the VAT refund for all the fake transactions is known as a VAT carrousel.

[kgwgk]

Yes. In the end the end customer pays the whole tax. But everyone along the chain has to collect its share for the taxman. In this way there is no need to check if the sale is or not subject to the tax. Everyone pays, always. It would be a simple system if it wasn’t for all the exceptions, special situations and opportunities for fraud.