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Mar 21

VAT rates on goods and services across European countries

 

Foto euro's op de grondThis article gives a short overview of the VAT rates across European countries.

In accordance to the principle of the free market,  the European Union value added tax (or EU VAT) is a value added tax on goods and services within the European Union (EU). The EU’s institutions do not collect the tax, but each member state is responsible to adopt a value added tax that complies with the EU VAT code. The EU has set the minimum standard VAT rate at 15%. Different rates of VAT apply in different EU member states, ranging from 17% in Luxembourg to 27% in Hungary. The total VAT collected by member states is used as part of the calculation to determine what each state contributes to the EU’s budget.

According to VatGlobal, specific articles of the main EU VAT directive dictate that EU member states must apply a standard rate of VAT within a particular range, also having the option of applying a reduced VAT rate no lower that 5%. However, several member states have implemented certain derogations from the directive which allow for a lower percentage.

In addition, the EU VAT directive comprises criteria regarding the nature of the goods and services to which the reduced rate may be applied. As a consequence, the member states apply the reduced VAT rate to the same types of products which circulate on the free market.

Moreover, in order to be in accordance with the reduced or standard VAT rates, member states may occasionally reclassify goods.

In the table below, the standard and the respective reduced VAT rates are shown for each member state.

 

Country VAT standard rates VAT reduced rates
Austria 20% 10% 13%
Belgium 21% 6% 12%
Bulgaria 20% 9%
Cyprus 19% 5% 9%
Czech Republic 21% 10% 15%
Germany 19% 7%
Denmark 25% N/A
Estonia 20% 9%
Greece 24% 6% 13%
Spain 21% 4% 10%
Finland 24% 10% 14%
France 20% 5% 10%
Croatia 25% 5% 13%
Hungary 27% 5% 18%
Ireland 23% 4.8% 9% 13.5%
Italy 22% 4% 5% 10%
Lithuania 21% 5% 9%
Luxembourg 17% 3% 8% 14%
Latvia 21% 12%
Malta 18% 5% 7%
Netherlands 21% 6%
Poland 23% 5% 8%
Portugal 23% 6% 13%
Romania 19% 5% 9%
Sweden 25% 6% 12%
Slovenia 22% 9.5%
Slovakia 20% 10%
UK 20% 0% 5%

 

More information regarding the categories of goods and services for which the VAT reduced rates apply in each country can be found by accessing the following link: https://bit.ly/2AvyH9K


About the Ecommerce Foundation

Article written by The Ecommerce foundation.

The Ecommerce Foundation is an independent organization, initiated by worldwide national ecommerce associations, online- and omnichannel selling companies from industries such as retail, travel and finance. 

By combining collective goals and efforts, the Ecommerce Foundation is able to realize projects that could not be realized on an individual basis.

They facilitate the  development of practical knowledge,  market insights andservices for which individual institutions, retail and ecommerce associations and B2C selling companies do not have the (financial) resources and/or capabilities for.