It is an indirect tax, typically on an ad valorem basis, applicable to a production process or stage.
For example, when manufacturing activity is completed, a tax may be charged on some companies.
Sales tax occurs when merchandise has been sold.
Businesses that elect to pay the turnover tax are exempt from VAT.
[3][4] Both were replaced in 1972 by VAT,[5] in preparation for Ireland's accession to the European Communities, which prohibited both taxes.