Comment by arlort

> Effectively VAT is only paid by consumers.

Yes, absolutely, in 99% of cases that is true. But conceptually there is a difference.

> NB: in you example if the company has paid more VAT than it has collected in the period then it gets and actual refund.

Yes, which is what I said as well. But the refund in itself is an additional step on top of the tax system and the money does get paid by the company in the first place. There is indeed a difference in how the cash flow of a company looks like.

That's the entire point of VAT, to make tax evasion harder by making everyone pay at every step and figuring out later the refunds

This is not a criticism of VAT or anything else by the way, as I said, in 99% of cases the company will get the VAT fully refunded and not pay anything on net over the fiscal year