The difference between Gross National Product at market prices and Net National Product at factor cost is

GNP at market prices includes both depreciation and net indirect taxes (indirect taxes minus subsidies), whereas NNP at factor cost excludes both. To move from GNP at market prices to NNP at factor cost, one must subtract depreciation (to get NNP at market prices) and then subtract net indirect taxes (to get NNP at factor cost). Therefore, the difference is depreciation plus net indirect taxes.