VAT / GST Across Jurisdictions
What VAT and GST are
Value Added Tax (VAT) and Goods and Services Tax (GST) are consumption taxes levied at each stage of the supply chain. The end consumer ultimately bears the tax — but each business in the chain collects it from the next party and remits it to the government, claiming back what they paid (input tax credits).
They are economically the same thing; the naming convention differs by country.
The key principle: VAT/GST is neutral for businesses (they charge it and claim it back), but compliance — registration, return filing, record-keeping — is a real administrative burden.
VAT/GST rates by country
Middle East & North Africa
| Country | Standard VAT/GST rate | Notes |
|---|---|---|
| UAE | 5% | Introduced January 2018; registration threshold AED 375,000 (mandatory) |
| Saudi Arabia | 15% | Raised from 5% to 15% in July 2020 |
| Qatar | No VAT | Qatar has not implemented VAT (GCC VAT framework not yet applied) |
| Bahrain | 10% | Raised from 5% to 10% in January 2022 |
| Oman | 5% | Introduced April 2021 |
| Kuwait | No VAT | Kuwait has not implemented VAT |
| Jordan | 16% (GST equivalent) | Jordan's General Sales Tax |
| Egypt | 14% | Standard rate |
| Morocco | 20% | Standard rate; reduced rates 7%, 10%, 14% |
| Tunisia | 19% | Standard rate |
| Lebanon | 11% | Standard rate (when functional) |
Europe
| Country | Standard VAT rate | Notes |
|---|---|---|
| UK | 20% | 5% reduced (domestic fuel, children's car seats); 0% (food, children's clothing, books); registration threshold £90,000 |
| Ireland | 23% | 13.5% reduced (hospitality, construction); 9% (newspapers, certain food); 4.8% (livestock) |
| Germany | 19% | 7% reduced rate (food, books, public transport) |
| France | 20% | 10% reduced (restaurants, transport); 5.5% (food, books); 2.1% (press) |
| Netherlands | 21% | 9% reduced (food, pharmaceuticals, books) |
| Spain | 21% | 10% reduced; 4% super-reduced |
| Italy | 22% | 10% reduced; 4% super-reduced |
| Portugal | 23% | 13% reduced; 6% super-reduced; Madeira/Azores: 16%/18% |
| Switzerland | 8.1% | Lowest in Europe; 2.6% for necessities; 3.8% for accommodation |
| Estonia | 22% | Raised from 20% in January 2024; 9% reduced |
| Cyprus | 19% | 9% and 5% reduced rates |
| Malta | 18% | 7% (accommodation); 5% (food, pharmaceuticals) |
| Sweden | 25% | Highest in EU; 12% reduced; 6% for culture/transport |
| Denmark | 25% | Flat rate; few reduced rates |
| Belgium | 21% | 12% and 6% reduced rates |
| Austria | 20% | 13% and 10% reduced rates |
| Poland | 23% | 8% and 5% reduced rates |
| Bulgaria | 20% | 9% for accommodation |
| Romania | 19% | 9% food/pharma; 5% books/housing |
| Czech Republic | 21% | 12% reduced |
| Hungary | 27% | Highest in EU; 18% and 5% reduced |
| Lithuania | 21% | 9% and 5% reduced |
| Latvia | 21% | 12% and 5% reduced |
| Luxembourg | 17% | Lowest in EU; 14%, 8%, 3% reduced rates |
| Liechtenstein | 8.1% | Same VAT area as Switzerland |
Asia-Pacific
| Country | Standard VAT/GST rate | Notes |
|---|---|---|
| Singapore | 9% | GST; raised from 8% in January 2024; registration threshold SGD 1M |
| Hong Kong | None | No VAT or GST |
| Australia | 10% | GST; registration threshold AUD 75,000 |
| New Zealand | 15% | GST; registration threshold NZD 60,000 |
| India | 0–28% (GST) | Tiered system: 0%, 5%, 12%, 18%, 28%; complex compliance |
| Japan | 10% | Consumption tax; 8% reduced rate for food and non-alcoholic beverages |
| South Korea | 10% | VAT; standard rate |
| China | 13% (goods) / 9% / 6% (services) | VAT; different rates by category |
| Thailand | 7% | VAT; temporarily reduced from 10% (extended multiple times) |
| Malaysia | 8% (SST) | Sales and Services Tax; reintroduced in 2018; GST was abolished |
| Indonesia | 11% | VAT (PPN); raised from 10% in April 2022 |
| Vietnam | 10% | VAT; 5% reduced rate for certain goods |
| Philippines | 12% | VAT |
| Taiwan | 5% | VAT (business tax) |
| Cambodia | 10% | VAT |
Americas
| Country | Standard VAT/GST rate | Notes |
|---|---|---|
| USA | No federal VAT/GST | Sales tax is state/local level: 0–10%+ depending on state; varies by product category |
| Canada | 5% (federal GST) | Plus provincial HST/QST; combined rate 5–15% depending on province |
| Mexico | 16% | IVA (Impuesto al Valor Agregado); 8% in northern border regions |
| Brazil | ~40% (combined) | Multiple taxes: PIS, COFINS, ICMS, ISS, IPI — one of the world's most complex indirect tax systems |
| Argentina | 21% | IVA; 10.5% reduced rate |
| Colombia | 19% | IVA; 5% reduced |
| Chile | 19% | IVA |
| Peru | 18% | IGV (Impuesto General a las Ventas) |
| Panama | 7% | ITBMS (Impuesto de Transferencia de Bienes Corporales Muebles y la Prestación de Servicios); 10% for alcoholic beverages/hotels |
| Uruguay | 22% | IVA; 10% reduced |
Africa
| Country | Standard VAT/GST rate | Notes |
|---|---|---|
| South Africa | 15% | VAT; registration threshold ZAR 1M |
| Nigeria | 7.5% | VAT; raised from 5% in 2020 |
| Kenya | 16% | VAT |
| Ghana | 15% | VAT/NHIL; effectively ~21% including health levy |
| Rwanda | 18% | VAT |
| Tanzania | 18% | VAT |
| Senegal | 18% | TVA |
| Morocco | 20% | TVA |
| Egypt | 14% | VAT |
| Mauritius | 15% | VAT; registration threshold MUR 6M |
The EU VAT system — special rules for digital services
The EU has specific VAT rules for digital services provided to EU consumers by non-EU businesses:
B2C Digital Services (selling to EU consumers) If you sell digital services (software, e-books, streaming, online courses, app subscriptions, etc.) to EU consumers — even as a non-EU business — you may be required to collect and remit EU VAT.
OSS (One-Stop-Shop): An EU mechanism allowing businesses to register for VAT in one EU member state and file a single quarterly VAT return covering all EU sales. Threshold: €10,000 in cross-border EU B2C digital service sales triggers OSS registration. For non-EU businesses: register in any EU country (Ireland and Germany are popular for English-language businesses).
Non-Union OSS: For non-EU companies with no EU establishment, registration in any EU member state provides OSS access.
B2B Digital Services (selling to EU businesses) When selling to EU businesses (B2B), the reverse charge mechanism generally applies — the business customer accounts for VAT in their own country. The seller does not need to register for VAT in the customer's country. The buyer's VAT number must be obtained and verified.
VAT for non-resident businesses: key practical points
Registration thresholds: Most countries have a registration threshold below which VAT registration is not required. Common exceptions: Australia requires registration for non-resident businesses selling digital services to Australian consumers regardless of turnover.
Reverse charge: For B2B cross-border services, reverse charge means the customer accounts for VAT (not the supplier). This significantly reduces compliance burden for international B2B service businesses.
VAT recovery: If your company is registered for VAT in a country where it incurs VAT on expenses (e.g., attending a conference in Germany), it may be possible to recover that VAT either through normal return if registered there, or through an 8th Directive refund claim (for EU businesses claiming VAT back from other EU countries).
Digital services: The EU, Australia, New Zealand, Singapore, UK, and many other countries have implemented rules requiring non-resident digital service providers to register and collect VAT/GST on sales to consumers in those countries. If you sell digital products globally, you need to assess your registration obligations in each market.
Other chapters in Part 4
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This content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.