VAT is Value Added Tax. You can find a full description of VAT and how it works on this wikipedia page https://en.wikipedia.org/wiki/Value-added_tax.

 From 1 January 2015, online sales will always be taxed in the country where the customer belongs, regardless of whether the supplier is based in the European Union or outside. VAT is on average 21% of the sale price in the EU


EU Taxation Rules

You can find more information about this EU directive here.