Goods and Services Tax is used in many countries worldwide, though not always under that name. Here's where GST applies, what it's called in each place, and how the major regimes compare.
Roughly 176 countries operate a GST or VAT system. In practice, these are similar consumption taxes, though the exact design and terminology vary by jurisdiction. France pioneered modern VAT in 1954, and adoption has spread steadily ever since. A cluster of countries call it GST, including Canada, India, Australia, New Zealand, and Singapore. Most of Europe, along with the UK, Brazil, China, South Africa, and many others, use the term VAT. Japan uses its own term, the Japanese Consumption Tax. The label differs; the core mechanism is similar.
Briefly, so the rest of this guide makes sense: GST is a consumption tax charged at each stage of production and distribution, with businesses reclaiming the tax they pay on inputs so that the cost ultimately falls on the final consumer. For a fuller definition of the terms used here, see our indirect tax glossary. One thing to keep straight throughout: a Goods and Services Tax is not a General Sales Tax or a Government Sales Tax, even though all three share the acronym.
Which countries use GST, and which use VAT
The choice of name tracks loosely with how a country structures the tax, but there's no hard rule. What matters for a business operating across borders is that these are both value-added consumption taxes, so the core compliance logic is broadly similar.
Countries that call it GST include Canada, India, Australia, New Zealand, Singapore, and the Maldives. Countries that call it VAT include all EU member states, the UK, China, Indonesia, Argentina, Switzerland, Peru, South Africa, Turkey, Vietnam, and Chile, among many others, plus the Gulf states covered below. Japan's version is the Japanese Consumption Tax, which functions as a VAT. One country worth flagging: Malaysia briefly ran a GST but replaced it in 2018 with a single-stage Sales and Service Tax, so it is no longer a GST country in the value-added sense.
A smaller group of jurisdictions runs a single-stage sales tax rather than a GST or VAT. The United States is the largest economy without a federal VAT or GST, and the sales tax is administered at the state level. Puerto Rico uses a Sales and Use Tax, and Malaysia's current SST also sits in this single-stage category. For how that single-stage model differs from GST, see the comparison guide linked at the end of this article.
GST rates and thresholds around the world
The countries below are among the best-known GST regimes, each with its own rate, registration threshold, and structural quirks. The variation is the point: even where the tax shares a name, no two systems are running the same way.
New Zealand
New Zealand introduced GST in October 1986, and its system is often treated as the model others copy. It applies a single rate uniformly across almost all goods and services, with very few exemptions or reduced rates, which is what keeps it simple to administer. The standard rate is 15%, with some supplies zero-rated or exempt. Businesses must register once taxable supplies exceed NZD 60,000 in any 12-month period.
Canada
Canada introduced GST in January 1991 and runs a dual system. It has a federal GST and, depending on the province, either a separate provincial sales tax or a harmonized sales tax (HST). Federal GST is 5% on most goods and services. Provincial sales tax rates vary by province, while HST provinces apply a single combined rate. Basic groceries, prescription medications, and exports are typically zero-rated. Businesses generally must register once taxable supplies exceed CAD 30,000 over four consecutive calendar quarters.
Singapore
Singapore introduced GST in April 1994 and runs a standard VAT-style system in which businesses collect the tax and remit it to the authorities. The standard rate is 9%, reached on 1 January 2024 as the second step of a two-stage increase from 7%. Registration is mandatory once annual taxable turnover exceeds SGD 1 million, with voluntary registration available below that.
Australia
Australia introduced GST in July 2000, replacing wholesale sales tax and a patchwork of state taxes with a single broad-based consumption tax. The standard rate is 10% on most goods and services, with specific exemptions and GST-free supplies. Registration is mandatory once annual turnover exceeds AUD 75,000, and smaller businesses can register voluntarily.
India
India introduced GST in July 2017 under the banner of "one nation, one tax," consolidating multiple indirect taxes into a single destination-based system. It runs a dual model in which both the central government (CGST) and state governments (SGST) levy tax on the same intra-state supplies. In September 2025, India overhauled its rate structure in a reform widely called GST 2.0, collapsing the old four-slab system into two principal rates: 5% for essentials and 18% for standard goods and services. A 40% rate now applies to a narrow set of luxury and sin goods such as tobacco and high-end vehicles, and many essentials sit at a nil rate.
Maldives
The Maldives introduced GST in October 2011. The standard rate is 8%, raised from 6% on 1 January 2023, with the usual exempt and zero-rated categories. Registration is mandatory once taxable supplies exceed, or are expected to exceed in the next 12 months, MVR 1 million, roughly USD 65,000.
GST and VAT elsewhere, by region
The six regimes above are the best-known GST-named systems, but the tax reaches far wider. A rough map by region:
Europe
Most European countries use VAT. All 27 EU member states operate VAT systems, with standard rates generally between 17% and 27%. EU rules requiring a standard rate of at least 15% for member states. The UK, Switzerland, and Norway have their own VAT systems outside the bloc. Europe has the highest concentration of VAT regimes globally.The Middle East
The Gulf region is the most recent major adopter of VAT. Under the GCC's unified VAT framework, four of the six Gulf states have gone live: the UAE and Saudi Arabia in 2018, Bahrain in 2019, and Oman in 2021. Rates diverge despite the shared framework, with the UAE and Oman at 5%, Bahrain at 10%, and Saudi Arabia at 15% after raising its rate from 5% in 2020. Qatar and Kuwait have signed the framework but not yet implemented.
Asia-Pacific
Asia-Pacific uses a mix of GST and VAT terminology. India, Singapore, Australia, and New Zealand refer to their systems as GST, while China, Indonesia, Vietnam, the Philippines, and South Korea operate VAT systems. Japan levies a Consumption Tax, which functions as a VAT-style value-added tax. Malaysia is the notable exception, having replaced its short-lived GST with a single-stage Sales and Service Tax in 2018.
Latin America
Latin America relies heavily on VAT-style consumption taxes, including major systems in Mexico, Argentina, Chile, Colombia, and Peru. Brazil is also a key jurisdiction to flag, but it is better described as a complex indirect tax system currently transitioning toward a VAT-style regime, rather than a straightforward VAT system.
Africa
Africa has broad VAT coverage, with South Africa, Nigeria, Kenya, Egypt, and Ghana among the many countries operating it.
United States
The most notable holdout is the United States, the largest economy without a national consumption tax of this kind, relying instead on state-level sales tax. Why that is, and how the US system works in its place, is covered in the related guide linked below.
Who pays GST and who has to register
Across all these systems, the obligation usually sits with the supplier. A business that crosses the local registration threshold, or meets another registration trigger, must register, charge tax to customers, and remit it to the tax authority. Where the supplier isn't registered or isn't established locally, the obligation may shift to the customer through the reverse charge mechanism, especially in B2B transactions, which has the buyer account for the tax directly.
Who has to register depends entirely on the country. Jurisdictions set their own thresholds, taxable-supply rules, customer-type rules, and requirements for non-resident suppliers, which is why a business selling into multiple GST countries can't apply a single rule everywhere. That fragmentation, one tax in principle, dozens of implementations in practice, is the recurring challenge of cross-border compliance.
Why GST compliance matters
For any business operating in a GST or VAT country, compliance isn't optional. Getting it wrong invites fines, penalties, and in some jurisdictions prosecution, alongside the reputational and financial damage that follows. As more tax authorities move to real-time digital reporting, the margin for error keeps narrowing, and the number of countries, rates, and rules a cross-border business has to track keeps growing.
How Fonoa helps
GST looks like one tax with many names, but every country sets its own rates, thresholds, and rules, and those rules change constantly. For a business selling across borders, keeping each calculation current by hand is a losing proposition.
Fonoa is the Tax Operating System for autonomous tax: AI that tracks every rule, acts on every obligation, and proves every decision, built on modular infrastructure to automate the entire tax lifecycle. Fonoa's Tax Engine determines the correct VAT, GST, and US sales tax treatment for transactions across 140-plus countries, factoring in whether a seller has crossed the relevant threshold in the buyer's country and what's being sold. Rates and rules are monitored and updated continuously, all on one shared data model with one audit trail.
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This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Tax rates, thresholds, and rules change frequently and vary by jurisdiction; the information here is accurate as of the date of publication but may not reflect subsequent changes. Always confirm current requirements with the relevant tax authority or a qualified adviser before acting.
