I'm sure you're aware of this, but at least for the EU, if you're an enterprise, you can reclaim VAT on all inputs, including goods or services paid for in the production of your own product.
As a general explanation:
"Here are the different types of VAT businesses must collect, pay, and calculate:
- Output VAT: This is the VAT businesses charge on their sales (outputs). For example, if a business sells a product for £200 with a 20% VAT rate, they charge £240, with £40 as the output VAT.
- Input VAT: This is the VAT businesses pay on their purchases (inputs). For instance, if a business buys raw materials for £100 and the supplier charges 20% VAT, the business pays £120, with £20 as the input VAT.
- Net VAT payable: When businesses file their VAT returns, they calculate the difference between the output VAT and the input VAT. If the output VAT is higher, they pay the difference to HMRC. If the input VAT is higher, they can reclaim the difference."
In the example above, the TOTAL VAT payable to the Government would be 40 OUT - 20 IN = 20 on the GBP200 in sales. The consumer pays the full 40 to the company. The company keeps half to reclaim the 20 they already spent on raw material 'input VAT', the other 20 goes to the government. The total VAT charged to the supply chain for all the intermediary materials at the end of all the accounting drills = 0.
If you're BMW, you buy steel, you pay VAT, you make parts, you pay VAT, and so on and so forth. At the end of all of that, you work out all the VAT you already paid, then subtract that from the VAT you collect from your final goods you sell to a consumer. Effective net VAT in the supply chain = 0. The only time VAT is
actually paid is when the consumer buys the car...
The reason that taxes paid to make the item aren't listed on a receipt is because there effectively AREN'T any taxes paid on materials used to make the item. Just the same as the US. The only time VAT is charged and NOT reclaimed is when the end consumer buys the end product. The maximum that the consumer has to pay is always 20% of the final sales price. That's it.
As such, no, VAT is not 'paid at each stage of development', or rather, it is, and then it's reclaimed.
For a good manufactured elsewhere, the same applies. VAT charged during production of the good is obviously 0, it was made elsewhere. The total VAT charged on the imported good is 20% of the final purchase price paid by the end consumer. The difference? All 20% goes straight to the government, as there's no 'pre-paid in-process VAT' that the company can reclaim (because they didn't pay any in the supply chain anyway). No net benefit to the company either way.
Even assuming your statement was true (which again, it isn't), I fail to see how EU governments willfully making their own internal enterprises less efficient would somehow lead to it being a barrier to trade for US companies trying to break into their markets and compete with them on price. If anything, it would rather seem that the opposite would occur...
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