As described by the European Commission, the VAT in the European Union (EU) is a consumption tax assessed on the value added to goods and services. It applies to goods and service that are bought and sold for use or consumption in the EU. Although goods that are sold for export or services that are sold to customers abroad are normally not subject to VAT, imports into the European Union are taxed.
Value Added Tax is charged to the buyer as a percentage of the price of the goods sold. The seller of the goods transfers the collected VAT to the revenue authorities but can deduct the amount of VAT it has paid to other “taxable persons” on purchases for business activities.
Learn more about the Value Added Tax (VAT).
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