Normally when selling internationally, products are assigned a set VAT rate such as 20%. International customers will either pay the VAT rate (if they are in Europe) or not if they live in a country that doesn't pay tax (such as USA).
International Tax Rates will allow a client to specify a VAT rate for specific delivery countries. For example, the client could specify that any orders delivered to Germany are subject to a 19% VAT rate.
Please note - If you don't have this feature, you are still able to change the tax status of a country to VAT or non-VAT, you just can't set specific rates on a per country basis.
The feature will also allow tax rates to be charged depending on where a customer lives by adjusting the ex VAT price instead of the inc VAT price without changing the price of the product