Indirect Tax

Definition

• A type of tax that passes through an intermediary before being paid to the government. Unlike direct taxes such as income and property taxes, indirect taxes are collected by a third party before being transferred to the government. A sales tax is an example of an indirect tax because the tax is collected by the seller at the point of sale and transferred to the government at a later date.

Alternate Spellings
sales tax

Related Terms and Acronyms

• Direct Tax — Definition,
  • A tax that is paid straight to the government.
• Goods and Services Tax (GS, GST) — Acronym, Canada,
  • A sales tax that applies in all Canadian provinces charged at 5% (as of 2012).
  ➥ Bank account transaction code.
• Harmonized Sales Tax (HST) — Acronym, Canada,
  • A sales tax used in some provinces to merge the GST and PST.
  ➥ Canadian consumption tax.
• Levy — Definition,
  • A cost imposed on an individual or entity.
• Provincial Sales Tax (PST) — Acronym, Canada,
  • A sales tax collected by some Canadian provinces.
• Sales Tax — Definition,
  • Federal and / or provincial taxes that are applied to purchases.
• Tax (TX) — Acronym,
  • A levy paid by an individual or entity that is collected by a government.
  ➥ Bank account transaction code.