VAT stands for Value-Added-Tax. It's a tax that's placed on each stage of the supply chain (eg. production, sale, delivery charges) for goods and services. VAT applies to orders that ship to a customer in one of the EU member states (based on “ship to” address).
You can think of it like sales tax. For orders fulfilled in the US, we charge a sales tax if the order is going to CA or NC. For orders fulfilled in Europe, we will eventually charge VAT if the order is going to an EU member state.
Key differences between VAT and sales tax:
VAT is added to every step of the inventory process for the manufacturer, distributor, and seller. Sales tax is only applied to the value of the product sold.
We'll calculate VAT based on Printful's price, sales tax is calculated from the end-customer's retail price.
Note: We'll start charging VAT in the fall. You can read about how it will affect your orders here.