What is VAT?

For starters…

VAT stands for value added tax

The standard VAT rate is 20% (it used to be 17.5% but it was increased in 2011)

What actually is it?

In the EU VAT is general type of consumption tax that is based on the value added to good and services, it’s worked out as a percentage. For all goods and services that are bought and sold for consumption in the EU, VAT is applied.

Exceptions

There are a selection of things that are exempt from VAT, for example postage stamps, financial and property transactions. You can view a full list here.

Information sourced from here and here.