If a company buys a 1000 USD computer to sell it, then the ultimate buyer pays the VAT. However, what happens when a company buys a 1000 USD computer to replace a server rack? At what point does "consumption" happen?
In practice it works so that everyone, both private citizen and company’s pays the vat, but companies can fill out a form and get the vat returned if the product was for internal use. They then add vat to their end product.
For example:
* A company buys a 1000 USD server and pays 1250 USD (server + vat). It sells it to a private citizen for 1250 USD (no profit). It can then keep 1000 USD and must give 250 USD to the state.
* A company buys a 1000 USD server and pays 1250 USD (server + vat). It sets it in a rack for internal use, and can then ask for the 250 USD vat back from the state.
(In reality you might do a lot of these deals b2b, and not actually transfer/invoice the VAT -- but that's the basic idea).
Oh, yeah, also not a lawyer, but a Norwegian.