VAT accrues whenever value is added to a product at each stage of the supply chain, from production to the point of sale. The amount of VAT users pay is equal to the cost of the product, less costs of any previously taxed materials used in production.
As your Merchant and Seller of Record, Xsolla is responsible for calculating, collecting, and paying taxes, including VAT. Section 6.4 of your Xsolla contract contains all the details on this process.