Business, tax and funding
input tax
In short and in plain language
Input tax is the value added tax a firm itself pays to suppliers and service firms.
Firms that charge this tax on their own bills can usually offset it. They take it off the tax they collect.
Those who use the small-business rule cannot make this deduction.
Definition
Input tax is the VAT a business itself pays to suppliers and service providers. Businesses that charge VAT on their own invoices can usually offset it against the VAT they collect. Those using the small-business rule cannot claim this deduction.