Summary of The European Union’s common system of value added tax (VAT)

The European Union has a common system of value added tax (VAT) that applies to all transactions made in the EU by taxable individuals or businesses, as well as imports into the EU.
The place of taxation depends on the nature of the transaction and type of product or service involved.
VAT is charged at the time of supply and the taxable amount includes all payments to the supplier, with some exceptions.
The standard rate of VAT is at least 15%, with some exceptions for reduced rates on specific goods or services.
Exemptions from VAT exist, with some allowing for the right to deduct VAT paid on acquired goods or services used for taxed transactions.
The directive sets out obligations for taxable and non-taxable persons, with exceptions and special schemes designed to reduce paperwork.
The directive also allows for a temporary reversal of VAT liability under strict conditions for Member States most affected by VAT fraud.