European Union VAT Directive

The European Union VAT Directive is a set of rules that harmonize how value-added tax (VAT) is applied across EU member countries. It ensures businesses pay VAT consistently on goods and services traded within the EU, facilitating smoother cross-border transactions. The directive defines what transactions are taxable, who is responsible for collecting VAT, rates applicable, and procedures for declaring and paying VAT. Its goal is to promote fair competition, reduce tax evasion, and create a cohesive internal market, while allowing member states to adjust rates within certain limits.