VAT (Value Added Tax)

A consumption tax levied at each stage of production and distribution on the value added at that stage, with the final cost ultimately borne by the end consumer. Standard VAT rates among major destinations: EU minimum 15% (typical 19–25%; Hungary highest at 27%, Luxembourg lowest at 17%), UK 20%, Switzerland 8.1%, UAE 5%, Singapore 9% (called GST), Australia 10% (GST), New Zealand 15% (GST), Mexico 16% (IVA), Thailand 7%, Japan 10%. Most jurisdictions exempt or zero-rate basic groceries, healthcare, education, financial services, and exports; reduced rates often apply to books, public transport, and pharmaceuticals. For relocators, VAT registration is typically only required when running a business above a threshold (~€85,000 EU average); employees pay VAT only as final consumers. The US is the only major OECD economy without a federal VAT — instead it operates state and local sales taxes ranging 0–10%.