Definição
VAT is the most common form of consumption tax worldwide — used in 170+ countries including the entire EU, UK, Australia (as GST), Canada (as GST/HST), Japan (as Consumption Tax), Saudi Arabia, UAE, and Mexico (as IVA). The US is the main exception; it uses retail sales tax instead.
How it works: each VAT-registered business charges VAT on its sales (output VAT) and reclaims the VAT it paid on purchases (input VAT). The net amount is remitted to the tax authority, so the tax ultimately falls on the end consumer who can't reclaim it.
Standard rates vary: UK 20%, Germany 19%, France 20%, Spain 21%, Italy 22%, Ireland 23%, Netherlands 21%, Saudi Arabia 15%, UAE 5%. Most countries also have reduced rates for essentials (food, books, medicines) and zero rates for exports.
Registration thresholds exist — e.g. £90,000/year in the UK, €22,000 in Germany, €85,000 for the Italian flat-rate regime. Below the threshold, small traders usually don't charge VAT.
Output VAT − Input VAT = VAT due to authority