Dropshippers must pay VAT, but what exactly is it?
Value added tax (VAT) is a consumption tax that is paid by the final consumer who \’consumes\’ products and services. VAT is levied on the value of goods or services added at each stage of production, distribution, or sale to the end customer. The retail store pays $360 for the juice and wants to make a profit of $400. But it has to pay $80 to the government as VAT and wants compensation for the plant\’s VAT. The customer doesn\’t have to pay VAT, but businesses in the chain do it.