Value added tax (VAT) is a sales tax levied on the sale of goods and services. In some countries, including Singapore, Australia, New Zealand and Canada, this tax is known as "goods and services tax" or GST. VAT is an indirect tax, in that the tax is collected from someone other than the person who actually bears the cost of the tax. - John Done (john.done@hotmail.com) ---- A common VAT system is compulsory for member states of the EuropeanUnion. The EuVAT system is imposed by a series of EuropeanUnionDirectives, the most important of which is the Sixth VAT Directive (Directive 77/388/EC). - Henry M ---- Not the �land Islands where I am from, we are outside the scope of the EU system of VAT. - Jukka ---- Can anyone tell me how VAT differs from a conventional SalesTax? ---- VAT differs from a conventional sales tax in that VAT is levied on every business as a fraction of the price of each taxable sale they make, but they are in turn reimbursed VAT on their purchases, so the VAT is applied to the value added to the goods at each stage of production. - John ---- OffTopic