Value-added tax

When you buy goods or services abroad, a percentage of the price goes to the government as value-added tax (VAT)—a consumption tax applied at each stage of production and sales. Understanding VAT rates and refund procedures matters significantly for expats, as they vary dramatically by country (from under 15% to over 25%), affect your cost of living, and determine whether you can recover taxes on business expenses or large purchases before leaving a country.