VAT (value added tax)

A consumption tax applied at each stage of production and distribution, with the end consumer carrying the final cost. Unlike US sales tax, which is charged only at the point of sale, VAT is collected and remitted at each stage. Rates vary by country: the UK is 20%, EU standard rates run 17 to 27%, and Australia's GST is 10%. US brands shipping to VAT-registered markets have to collect and remit VAT or face delivery failures.