VAT (Value Added Tax)
A consumption tax levied on the value added at each stage of production or distribution, used in most countries outside the US.
VAT is applied in over 160 countries worldwide. Unlike US sales tax, which is collected only at the point of final sale, VAT is collected at each stage of the supply chain. Businesses can typically reclaim VAT paid on their inputs. Standard VAT rates in the EU range from 17% (Luxembourg) to 27% (Hungary).