Gross Value Added and Gross Operating Surplus are sometimes expressed at Factor Cost, and sometimes at Basic Prices. Gross Value Added is also sometimes given at Market Prices. The Market Price is the amount of money actually paid by the end user. It includes Product Taxes (like VAT), Non-Product Taxes on Production (such as local authority Rates), and excludes Product Subsidies (such as for public transport) and Non-Product Subsidies (such as farm modernisation Subsidies) received by the producer.
Gross Value Added at Market Prices is the same as Gross Domestic Product at Market Prices.
In the Income Method estimates in National Accounts, Gross Value Added at Market Prices is calculated first by getting Gross Operating Surplus at Factor Cost, then by adding Non-Product Taxes and subtracting Non-Product Subsidies to get Gross Operating Surplus at Basic Prices. Then by adding Compensation of Employees to this we get Gross Value Added at Basic Prices. Then we add Product Taxes and subtract Product Subsidies to get Gross Value Added at Market Prices.
Product Taxes and Subsidies such as VAT are generally quite significant: in total for every €15 Current Price Gross Domestic Product, around €1 is Product Taxes less Subsidies and €14 is Basic Price Gross Value Added.
Market Prices can be Current Prices or Constant Price. Constant Market Prices have been adjusted for inflation, while Current Market Prices have not been adjusted for inflation.
