Which of the following is true about output VAT?

Output VAT refers specifically to the value-added tax that businesses charge on the sales of their goods and services to customers. When a business sells its products or services, it adds VAT to the sales price, and this amount is collected from the customer at the point of sale. This is a fundamental aspect of how VAT operates, as businesses act as intermediaries, collecting tax on behalf of the government.

The other options do not accurately capture the nature of output VAT. The first option describes input VAT, which is the tax paid on purchases made by a business, while the third option incorrectly suggests that output VAT cannot be reclaimed; in fact, businesses can reclaim input VAT on their purchases to offset against their output VAT liability. The fourth option regarding variations by company size does not apply, as the VAT rates are standard across businesses irrespective of size, though the absolute amount of output VAT collected may vary depending on sales volume. Thus, the correct choice highlights the primary function of output VAT in the sales process.