Ad valorem

Updated: Aug 20, 2021

From the Latin ‘according to the value’. An adjective applied to tax, duties. etc., where the amount payable to the Inland Revenue, Excise Authority or whoever receives it is directly related to the size of the chargeable transaction and is not a fixed amount, e.g. duty on share capital is payable on an ad valorem basis by the company, whereas a driving licence fee is of a fixed amount.

Reference: The Penguin Business Dictionary, 3rd edt.

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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.