VAT vs GST: Differences, Rates and Invoice Rules by Country

If you are comparing VAT and GST because you have a client abroad, the useful question is not "which tax is it?" but "what does this country require me to charge and print?". This guide explains the shared mechanism with a worked example, compares eight countries side by side using the same official sources as our country guides, and shows how the same fee looks on an invoice in each.

Last reviewed: October 27, 2026. Country figures come from the tax authorities cited in each linked guide, all accessed October 27, 2026. This is general information, not legal or tax advice. Rules depend on your registration, your customer and what you supply, so check with the tax authority or an adviser.

Are VAT and GST the same tax?

Yes, in design. The OECD describes a standard VAT as one where "the tax is collected from suppliers through a staged process whereby the supplier collects the VAT from its customer and remits it to the authorities after having deducted any recoverable input VAT" (OECD, Consumption Tax Trends 2022). The OECD's own guidance for cross-border trade is titled the International VAT/GST Guidelines, because it applies to both labels. Australia, New Zealand, Singapore, Canada and India call their version GST; the UK and EU countries call theirs VAT.

The real differences sit in national law, not in the acronym:

How the tax works: a worked example

Illustrative example at a 10% rate. The mechanics are the same whether the country calls it VAT or GST.

A furniture maker buys timber, builds a table and sells it to a shop, which sells it to a consumer. Each registered business charges 10% on its sale and deducts the 10% it paid on its purchase.

The tax authority collects $80 in total, exactly 10% of the $800 final price, but in three instalments. The consumer bears the cost; the businesses act as collectors. That is why the customer's invoice matters so much: a registered business usually needs a valid tax invoice to deduct the tax it paid. That deduction is usually called an input tax credit.

A US retail sales tax works differently. It is charged by states and local governments on the final sale to the consumer, rather than at every stage with a credit for tax paid on purchases. The United States has no national VAT or GST. See sales tax nexus for how US state rules apply to sellers.

VAT and GST compared in eight countries

Each row links to our country guide, which cites the tax authority for every figure.

For EU-wide rules and how each layer (content, calculation, format, clearance, reporting) differs, see regional invoicing.

One fee, eight invoices: what changes on the page

Illustrative example. A consultant registered for the local tax in each country invoices a domestic business client 2,000 in local currency for standard-rated professional services. Rates from the table above; check the rate for your own service.

Three lessons from the table. First, the label is not cosmetic: Germany, the UK and Ireland expect VAT shown per rate, and Australia and Singapore expect the document to identify itself as a tax invoice. Second, Québec and same-state Indian invoices need two separate tax lines, calculated on the net price. QST is charged on the price before GST, not on top of it. Third, the Indian invoice above is only valid for a supplier below the ₹5 crore e-invoice threshold; above it, the invoice must first be registered on the government portal.

Do you charge VAT or GST to clients in another country?

Usually the destination country's rules decide. The OECD's guidelines state that internationally traded services "should be taxed according to the rules of the jurisdiction of consumption". In practice that means:

• Business clients abroad (B2B services): many countries treat the service as taxed where the customer is, so you often charge no local tax and the customer accounts for it under a reverse charge. In the EU, the invoice shows the customer's VAT number and a reverse-charge note. See reverse charge and the Ireland guide's cross-border example.
• Exports from your country: many systems zero-rate qualifying exports of goods and international services, as Singapore does. The conditions are specific, so check your own authority's rules.
• Consumers abroad (B2C), especially digital services: several countries require foreign sellers to register and charge their tax once sales pass a threshold. This is where most small sellers get caught.
• You are not registered anywhere: charge no VAT or GST and do not call your document a tax invoice.

What InvoiceQuickly can and cannot do with VAT and GST

InvoiceQuickly creates English-language PDF invoices with one tax percentage per invoice, calculated on the discounted subtotal and added on top. Available today:

• one tax rate per invoice, printed as a generic "Tax (x%)" line, which covers single-rate invoices such as 20% UK VAT, 10% Australian GST or 13% Ontario HST
• invoices in USD, EUR, GBP, CAD, AUD, INR or PKR
• your business tax ID and your client's tax ID stored in settings and client records

Not available today:

• printing either tax ID on the PDF; type your VAT or GST number into the notes or terms instead
• a "VAT", "GST" or "Tax invoice" label, or automatic reverse-charge wording
• two tax lines on one invoice (GST plus QST, CGST plus SGST) or different rates on different lines
• tax-inclusive prices
• any e-invoicing format or government submission, such as Peppol, InvoiceNow, XRechnung or India's IRP

So InvoiceQuickly fits a single-rate invoice in a country where a PDF is still valid, with the missing details typed in. It does not fit Québec or same-state Indian invoices that need split taxes, mixed-rate German invoices, or any country or business that must e-invoice. See pricing for what Free and Pro include.

Frequently asked questions

What are the key differences between VAT and GST?

In design, none: both are staged consumption taxes where registered businesses deduct the tax paid on purchases. The differences are national: rates (from 5% to 23% standard rates in the countries above), how many rates and layers there are, registration thresholds, the details a tax invoice must show, and whether e-invoicing is required.

What does GST stand for?

Goods and services tax. Australia, New Zealand, Singapore, Canada and India use the name. Canada also has a harmonized sales tax (HST) that combines GST with provincial tax in some provinces, and India splits GST into central, state and integrated parts.

Is there VAT in the USA?

No. The United States has no national VAT or GST. States and many local governments charge sales tax, collected once on the final sale. A US business selling abroad may still need to deal with another country's VAT or GST.

Who has to pay VAT or GST?

The final consumer bears it. Registered businesses collect it on their sales, deduct what they paid on purchases, and pay the difference to the tax authority. Businesses below the registration threshold, where one exists, generally do not charge it.

Do I need to show my VAT or GST number on invoices?

Generally yes, if you are registered and issuing a tax invoice: the UK, Ireland, Australia, Singapore, New Zealand (over $200), Canada (from C$100) and India all require it in the cases set out in each guide. In InvoiceQuickly, add it to the notes or terms, because the saved tax ID is copied to new invoice PDFs.

Can I use the same invoice template for VAT and GST countries?

You can use one layout, but not one set of details. Check the country's required fields, document title, rounding and currency rules, and whether it requires an e-invoice. Start from the tax invoice template or the EU invoice template, then compare against what to include on an invoice and the VAT invoicing guide.