Full Definition
VAT is a broad-based consumption tax applied to goods and services at each production stage, with businesses claiming back input VAT. Standard rates range from 5% (Singapore GST) to 27% (Hungary). Most jurisdictions apply reduced rates on essentials like food and medicine. Cross-border e-commerce is subject to destination-country VAT under OECD guidelines. For expats, VAT on services can add 15–25% to subscription and freelance invoicing costs.
Global Rates at a Glance
Hungary
27%
Vat Standard Rate
Sweden
25%
Vat Standard Rate
France
20%
Vat Standard Rate
Germany
19%
Vat Standard Rate
Australia
10%
Vat Standard Rate
Singapore
9%
Vat Standard Rate
United States
0%
Vat Standard Rate
Switzerland
8.1%
Vat Standard Rate
Key Facts for Expats & Digital Nomads
VAT/GST is largely irrelevant to individuals as a cost — businesses recover it via input tax credits. It becomes relevant when you provide services: you may need to register for VAT in every EU country where you have customers, unless you use the EU One Stop Shop (OSS).
Frequently Asked Questions
What is Value Added Tax (VAT)?
A consumption tax charged at each stage of production, collected at the point of sale. VAT is a broad-based consumption tax applied to goods and services at each production stage, with businesses claiming back input VAT. Standard rates range from 5% (Singapore GST) to 27% (Hungary). Most jurisdictions apply reduced rates on essentials like food and medicine. Cross-border e-commerce is.
Which countries have the lowest Value Added Tax (VAT)?
Lowest VAT: UAE 5%, Switzerland 8.1%, Singapore GST 9%, Japan 10%, Luxembourg 17%. Highest: Hungary 27%, Denmark/Sweden/Norway 25%. The US has no federal VAT, using state-level sales tax instead.
How does Value Added Tax (VAT) affect expats and digital nomads?
VAT/GST is largely irrelevant to individuals as a cost — businesses recover it via input tax credits. It becomes relevant when you provide services: you may need to register for VAT in every EU country where you have customers, unless you use the EU One Stop Shop (OSS).
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Disclaimer: This information is for educational purposes only and does not constitute tax advice. Tax laws change frequently. Consult a qualified tax professional before making any decisions.