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The logic behind when what VAT is to be payed or not, often can not be recognised.
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VAT is simple and eligibility is easily recognised. If people cannot recognise when it has to be paid or not, or when it has to be paid and then reclaimed then that is their own problem for letting themselves get ripped off.
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Here (in Slovenia), everything has a 20% VAT on it.
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Sovenia like most of europe has two rates(some have more), they could have got more than two rates and got themselves total exemptions when they negotiated accession but they didn't bother.