GlossaryCustoms and trade
VAT (Value Added Tax)
A consumption tax charged in the EU, UK and many other countries, including on imported goods at the border or at checkout.
Value Added Tax (VAT) is a consumption tax used in the European Union, the United Kingdom and many other countries. Unlike U.S. sales tax, it is collected at each stage of the supply chain and borne by the final consumer.
Imported goods are generally subject to import VAT in the destination country. For ecommerce, many countries now require sellers or marketplaces to collect VAT at checkout on low-value imports instead of having it collected at the border, as in the EU's IOSS and the UK's point-of-sale rules.
Similar taxes go by other names, such as GST in Australia, Canada and New Zealand.
Learn more in our Cross-border shipping articles.
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