Are you certain commission payouts are subject to VAT, since affiliates are not really part of the supply chain? At any rate, there is no way to find out affiliates' locations automatically, so you can only contact them personally to ask, and maybe refuse to pay out to any who refuse to respond.
We have no way to add VAT to affiliate commission totals in the masspay file, so you would need to edit the file manually before uploading it to PayPal. It's a comma-delimited text file, so you can edit it in any plaintext editor such as Notepad, or even use a spreadsheet program like Excel; just make sure that you save the edited file as a plaintext, comma-delimited (or CSV for comma-separated values) file.