European Union Value Added Tax Directive

The European Union Value Added Tax (VAT) Directive is a set of rules that governs how VAT is charged on goods and services within EU member states. VAT is a tax added at each stage of production and distribution based on the value added to the product. The Directive aims to harmonize VAT systems across the EU, ensuring consistent application, collection, and compliance while allowing member countries some flexibility. This ensures fair competition, simplifies cross-border trade, and supports the functioning of the single market by reducing barriers related to taxation.