drupal commerce

During Drupalcon Szeged, we spent a lot of time talking about how to handle VAT. Unfortunately I have only a slightly better idea of VAT today as I did before I left for DrupalCon. I would like some input from people in the community who work with VAT on a daily basis.

I'd like to try and answer the following.

1. What is VAT
2. How does it work
3. How should VAT be handled by ecommerce companies inside and outside Europe

Using this information we should be able to support VAT with Drupals commerce systems.

@ DrupalCon Szeged we decided to create a group for general drupal commerce questions, help, and planning. Alex UA and myself will be co-maintaining the group, however we want this group to be very community led.

I thought a good place to start would be coming up with a better description than the current "A common, impartial place to discuss Drupal related commerce."

What are your thoughts?