What is defined as output tax in the context of VAT?

Output tax refers to the Value Added Tax (VAT) that a business collects from its customers on the sales of goods or services it provides. When a business sells products or services, it adds VAT to the sale price, which is then passed on to the customer. This collection is essentially an obligation on the part of the business to account for the tax that is to be paid to the tax authorities.

In the context of VAT, the concept of output tax is fundamental as it represents one of the primary mechanisms for tax collection within the VAT system. The business collects this tax on behalf of the government and is responsible for remitting it to the tax authorities after calculating the total output tax from its sales.

The other options do not accurately fit the definition of output tax. The tax collected on imported goods relates to import VAT rather than sales transactions. Tax paid by consumers on their purchases is related to the end-user experience but does not specifically define the business's role in collecting VAT. Finally, tax on services provided abroad may involve different regulations and is not classified under output tax since it does not directly pertain to domestic sales transactions.