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Question

Value-added tax, VAT, is a tax charged on goods and services in European countries. Many European countries offer refunds of some VAT to non-resident based businesses. VAT is included in a price that is quoted. That is, if an item is marked as costing $10, that price includes the VAT. In The Netherlands, foreign businesses are entitled to a refund of 84% of the VAT on automobile rentals. Write a function for the refund an American company could expect r(v) if v represents the VAT amount.

Solution

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Answered 2 years ago
Answered 2 years ago
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Since the refund is 8484 per cent of the value added tax, to obtain the refund, we have to multiply the value added tax vv by

84100=0.84\frac{84}{100} = 0.84

Thus, the refund is

r(v)=0.84vr(v) = 0.84v

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