Value Added Tax Directive

The Value Added Tax (VAT) Directive is a European Union framework that regulates how VAT is applied across member countries. VAT is a consumption tax added to goods and services, which businesses collect from customers and pass on to the government. The directive establishes rules for determining tax rates, exemptions, and compliance, ensuring a consistent approach across the EU. This helps facilitate fair trade within the single market, prevents tax avoidance, and supports economic cooperation among member states while allowing flexibility for each country to implement its own VAT systems.