What is VAT (Value Added Tax)?
VAT is a consumption tax applied to most goods and services in the European Union, added at each stage of the supply chain.
VAT is charged to consumers based on the value added to goods and services at each stage of production or distribution. It’s a significant source of revenue for EU governments.
When a bakery in France sells bread, it charges VAT on top of the sale price. This VAT is then remitted to the government.