VAT stands for Value Added Tax. It’s a consumption tax levied on the value added to goods and services at each stage of production or distribution. VAT is commonly used in many countries around the world as a way to generate revenue for the government. It’s typically collected by businesses on behalf of the government and then remitted to the appropriate tax authority. VAT is usually calculated as a percentage of the selling price of a product or service. It’s considered an indirect tax because it’s ultimately paid by the end consumer, but it’s collected and remitted by businesses along the supply chain.