Value Added Tax (VAT) is an indirect consumption tax levied on the value added to goods and services at each stage of the supply chain, from production to final consumption.

VAT is applied throughout the supply chain, with businesses collecting it on behalf of the government and remitting the difference between VAT collected on sales and VAT paid on purchases.

It serves as a significant source of government revenue and is used in over 160 countries worldwide, accounting for approximately 20% of global tax revenue. VAT is mandatory in EU countries and many other jurisdictions as a key component of their tax systems.