In general, the purpose of taxes is to satisfy society's need for money. Every citizen must be involved in the payment of services of general interest, which is done through taxation. Usually the tax system can be divided into two parts, direct and indirect taxes. Direct taxes are paid on income received, such as payroll income, capital income or corporate profits. Each employee pays a certain percentage of tax on their salary. Indirect taxes, in turn, are paid by the final consumers of goods or services. The most important of the indirect taxes is VAT. Indirect taxes in international trade mean that the tax revenue accrues, as a general rule, to the state in which the final consumption takes place and not, for example, to the state in which the goods are manufactured.

In most countries, businesses are obliged to collect VAT from citizens. They increase the price of the products or services they sell by a certain VAT percentage and give this share to the state. The value added percentage usually varies between 0% and 25%. In many developing countries such as India, sales taxes and VAT are key revenue sources, as high unemployment and low per capita income render other income sources inadequate. However, there is strong opposition to this by many sub-national governments, as it leads to an overall reduction in the revenue they collect. In Qatar, there is no VAT in use.

The following table displays the VAT rates of EU countries:

Country	Value-added tax
Sweden	25,0
Denmark	25,0
Finland	22,0
Belgium	21,0
Ireland	21,0
Italy	20,0
Austria	20,0
Portugal	20,0
France	19,6
The Netherlands	19,0
Greece	19,0
Germany	19,0
Spain	16,0
Luxembourg	15,0