It also applies to imported goods and services. As the tax is calculated at every stage, it is important to ensure there is no accumulation of tax. This is achieved by means of a process known as input tax deduction. The amount of tax paid when purchasing products and services to be used in subsequent processing can be deducted from the taxes relating to the final sale. As a result, only the added value provided by the company is taxed. Within the EU, some of these proceeds go to the individual states, with others going to the Union. The tax is payable by the end consumer.
To prevent a company being taxed on its international trade in both its home country and the export country, the EU has a rebate system which avoids companies being taxed twice. Swiss companies become liable for value added tax from the first turnover in an EU country. It is their own responsibility to ensure they are registered with the tax authorities. Efforts are currently being made within the EU to improve harmonisation and simplicity in terms of value added tax legislation.