An
ad valorem tax (
Latin for "according to value") is a
tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a
sales tax or
value-added tax (VAT). An
ad valorem tax may also be imposed annually, as in the case of a real or personal
property tax, or in connection with another significant event (e.g.
inheritance tax,
expatriation tax, or
tariff). In some countries a
stamp duty is imposed as an
ad valorem tax.