Value Added Tax (VAT) is a consumption tax added at each stage of production and at the point of sale. Unlike US sales tax (added only at final sale), VAT is collected throughout the supply chain. Most countries outside the US use VAT.
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Pro Tip
When comparing prices internationally, always check if VAT is included. US prices typically exclude sales tax; European prices usually include VAT.
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Did You Know?
The US is the only developed country without a national VAT. Instead, it relies on state and local sales taxes, which vary from 0% to over 10% and are not collected along the supply chain.
References
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