Value Added Tax (VAT), also known as Goods and Services Tax (GST) in some countries, is a consumption tax placed on the value added to goods and services at each stage of production and distribution. At each stage, the business collecting the VAT can also deduct the VAT they paid on their inputs (e.g., the clothing manufacturer deducts the VAT paid on the fabric). This avoids double taxation and ensures that only the final consumer bears the full burden of the tax. Businesses act as collection agents for the government, remitting the collected VAT to the tax authorities.

Online sellers who sell goods or services to B2C customers are usually required to register for VAT and obtain a VAT number. This is to ensure that they are in full compliance with VAT regulations. VATAi can help you with your VAT registration & filings in key markets, so you can get the VAT number you need in the relevant jurisdictions.