Europe

European countries - VAT Rates Guide

June 28, 2024
European countries - VAT Rates Guide

Value Added Tax (VAT) is a consumption tax charged and collected at each stage of the supply chain. It is a significant source of public revenue. In Europe, VAT rates can be classified into three categories:

  • Standard rates (for most goods and services)

  • Reduced rates (for essentials like food and medical supplies)

  • Super-reduced rates or zero rates (for specific items like newspapers and books)

The history of the harmonized EU VAT system began with the European Economic Community (EEC) in 1957. The first directive harmonizing VAT within the EEC was adopted in 1967 to replace turnover taxes and establish a standard VAT system. 

Despite numerous directives and regulations introduced to standardize VAT rules and ensure the smooth functioning of the single market, differences among Member States still exist, making it essential for businesses and individuals to stay informed about the varying VAT rates and regulations.

This guide for VAT rates in Europe outlines some basic rules regarding VAT rates following the VAT Directive and examples of VAT rates in the EU and other European countries that aren’t part of the Single Market.

VAT Rates Guide

VAT Rates in the EU

The EU VAT Directive defines the regulatory framework for VAT rates in the EU. Within this framework, each Member State sets the VAT rates and categories of supplies to which each rate applies. However, the standard rate shouldn’t be set under 15%.

Since April 2022, EU countries can apply up to two reduced rates as low as 5% to specified goods and services and one super-reduced rate below 5% to essential items.

Austria VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions; with some exceptions;

  • Reduced rate - 13% - Applies to many standard products or services, such as food and drink, agricultural products and services, medicines, books, and daily newspapers;

  • Reduced rate - 10% - Applies to the import of particular items; the delivery, purchase, import, and installation of solar modules and storage components for food; books, newspapers, and magazines; 

  • Zero rate - 0% - Applies to the intra-community supply of goods, export to non-EU countries, and international transport of passengers;

    • Special reduced rate for specific regions - 19% - Standard rate for regions Jungholz and Mittelberg;

Belgium VAT Rates

  • Standard rate - 21% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 12% - Applies to restaurant and catering services; photo pharmacy products;

  • Reduced rate - 6% - Applies to different kinds of food products; agricultural services, transportation services; 

  • Zero rate - 0% - Applies to intra-community supplies; newspapers and periodical publications appearing at least 48 times per year, except for articles published online; 

Cyprus VAT Rates

  • Standard rate - 19% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 9% - Applies to accommodation services, restaurant and catering services, transport of passengers;

  • Reduced rate - 5% - Applies to entry fees to theaters, cinemas at sports events, amusement parks, and similar cultural events, bottled water;

  • Super reduced rate - 3% - Applies to books, newspapers, magazines, medicines;

  • Zero rate - 0% - Applies to intra-community supply of goods, export of goods;

Germany VAT Rates

  • Standard rate - 19% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 7% - Applies to the granting, transfer, and exercise of rights arising from copyright law, the transport of people with taxis and trains;

  • Zero rate - 0% - Applies to import of particular items; the delivery, purchase, import, and installation of solar modules and storage components for specific  photovoltaic system;

Denmark VAT Rates

  • Standard rate - 25% -Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Zero rate - 0% - Applies to intra-community supply of goods, export of goods;

Greece VAT Rates

  • Standard rate - 24% -Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme, or exempted transactions;

  • Reduced rate - 13% - Applies to accommodation services, restaurant, and catering services;

  • Reduced rate - 6% - Applies to books, newspapers, magazines, medicines;

  • Super reduced rate - 4% - Applies to contract-based works that are solely connected with the removal of architectural barriers that hinder the mobility of persons with disabilities in private or public buildings or buildings of public interest;

  • Zero rate - 0% - Applies to intra-community supply of goods, export of goods;

    • Special reduced rate for specific regions - a standard rate of 17%- The Aegean Islands of Leros, Lesvos, Kos, Samos, and Chios;

Spain VAT Rates

  • Standard rate of 21% Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 10% - Applies to food, accommodation, and catering services;

  • Reduced rate - 4% - Applies to essential food, books, or medicines;

  • Zero rate - 0% - Applies to the intra-community supply of goods, export, health care, or educational services;

Finland VAT Rates

  • Standard rate - 24% -Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 14% - Applies to groceries, food, and restaurant and catering services;

  • Reduced rate - 10% - Applies to books, newspapers, and magazines (print and electronic publications), pharmaceutical products;

  • Zero rate - 0% - Applies to the export and sales of goods within the EU to VAT-liable buyers;

France VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 10% - Applies to certain accommodation services; entrance fees to museums, zoos, monuments, thermal establishments, passenger transport;

  • Reduced rate - 5.5% - Applies to books in any medium; most food products;

  • Reduced rate - 2.1% - Applies to medicines;

  • Zero rate - 0% - Applies to an exhaustive list of financial services, Intra Community supply, Export;

  • Special reduced rate for specific regions

    • For Corsica: rate 13% on oil products; rate 10% on construction works, sales on farm machinery, sales on eaten-in products, etc.; rate 2.1% (reduced rate), rate 0.9% on sales of live animals to non-subjected to VAT entities, and on the first performances or circus

    • In Martinique, Guadeloupe, and Réunion, the standard is 8.5%, the reduced rate is 2.1%, and the super reduced rate is 1.05% (for the press)

Italy VAT Rates

  • Standard rate - 22% -Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 10% - Applies to electricity for domestic use, accommodation services, access to theatrical performances of any kind;

  • Reduced rate - 5% - Applies to urban passenger transport services are carried out using means of transport authorized to carry out sea, lake, and river transport services;

  • Reduced rate - 4% - Applies to fresh milk for retail sale, butter, cheese, and dairy products, newspapers and daily news bulletins, orthopedic devices;

  • Zero rate - 0% - Applies to exports, operations with San Marino and Vatican City, Intra-community supply;

Lithuania VAT Rates

  • Standard rate - 21% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 9% - Applies to thermal energy supplied for space heating, printed and electronic books and printed and electronic non-periodical information publications, accommodation services, passenger and luggage transport services;

  • Reduced rate - 5% - Applies to the supply of pharmaceuticals, medical aid equipment;

  • Zero rate - 0% - Applies to the supply of goods leaving the EU, supply of goods to another Member State, insurance and financial services linked to the export of goods;

Luxembourg VAT Rates

  • Standard rate - 17% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 14% - Applies to limited financial services; wine fermentation; cleaning products;

  • Reduced rate - 8% - Applies to flowers; domestic fuels; electricity; motor fuel;

  • Super reduced rate - 3% - Applies to essential foods, cultural event entrance, passenger transport, restaurant services, medical equipment, children's clothing, copyright, specific agricultural inputs, books and journals, domestic energy sources;

  • Zero rate - 0% - Applies to Intra-community passenger travel by air and sea, exports and intra-community supplies of goods;

Netherlands VAT Rates

  • Standard rate - 21% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 9% - Applies to many standard products or services, such as food and drink, agricultural products and services, medicines, books, daily newspapers and magazines;

  • Zero rate - 0% - Applies to intra-community supply, export;

Poland VAT Rates

  • Standard rate - 23% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 8% - Applies to books, newspapers, and magazines, accommodation services, passenger transport, medical products;

  • Reduced rate - 5% - Applies to electronic publications, agricultural products – specifically indicated, printed books and certain magazines;

  • Zero rate - 0% - Applies to exports, Intra-community supply of goods; 

Portugal VAT Rates

  • Standard rate Mainland 23%, Azores  16%, Madeira 22% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Intermediate rate Mainland  13%, Azores - 9%, Madeira - 12% - Applies to certain food products; catering services;

  • Reduced rate Mainland 6%, Azores 4%, Madeira 5% - Applies to certain food products, books, newspapers, and magazines; rental of reserved areas in camping and caravan parks, including closely linked services;

VAT Rates in the non-EU Countries 

Non-EU European countries frequently align their VAT policies with the EU's VAT Directive to ensure consistency and ease trade with EU Member States. Although not legally required, these countries choose to harmonize their VAT systems with the EU's VAT system for several reasons, including fostering economic integration, simplifying tax administration, and reducing trade barriers. In addition, some countries align with EU VAT rules as part of the EU membership process.

Albania VAT Rates

  • Standard rate - 20 % - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Zero rate - 0% - Applies to the export of goods, the supply of services directly linked to the import or export of goods;

Andorra VAT Rates

  • Standard rate - 4.5% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 1% - Applies to food and drinks and certain media like books, magazines, and newspapers;

  • Increased rate - 9% - Applies to banking and financial service;

  • Zero rate - 0% -  Applies mainly to health and education products and services;

Bosnia and Herzegovina VAT Rates

  • Standard rate  - 17% - Applies to goods and services and import of goods to Bosnia and Herzegovina.

  • Zero rate - 0% - Applies to the export of goods

Iceland VAT Rates

  • Standard rate - 24% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 11% - Applies to accommodation services, catering, and sale of food, sale of alcohol and alcoholic beverages, transportation of passengers, sale of newspapers, magazines, and district newspapers;

  • Zero rate - 0% - Applies to export of goods and services, electronically supplied services: these services are considered used where the buyer is domiciled or has a venue of operations;

Liechtenstein VAT Rates

  • Standard rate - 8.1% - Applies to transactions (and importation) of all other goods and on all other services subject to the tax;

  • Reduced rate - 2.6% - Applies to food, medicine, newspapers, magazines, books, and other printed matter of a non-advertising nature, electronic newspapers, magazines and books without advertising character;

  • Special rate - 3.8% - Applies to accommodation services;

North Macedonia VAT Rates

  • Standard rate - 18% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 10% - Applies to other food products that are not considered essential products for human consumption;

  • Reduced rate - 5% - Applies to essential food products, accommodation services, or accommodation with breakfast, books as well as electronic/digital textbooks, brochures, and similar printed materials, newspapers, and other periodicals;

Moldova VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 12% - Applies to accommodation services, food, and/or beverages, except for alcoholic production, prepared or unprepared, for human consumption;

  • Reduced rate - 8% - Applies to certain foods such as bread and milk products, medicine, for goods imported and/or delivered on the territory of the Republic of Moldova;

Montenegro VAT Rates

  • Standard rate - 21% - Applies to delivery of products and services performed by the taxpayer in the course of his activities for a fee and product import;

  • Reduced rate - 7% - Applies to essential products for human consumption, medicines, books, accommodation services;

  • Zero rate - 0% - Applies to products exported from Montenegro by the seller;

Norway VAT Rates

  • Standard rate - 25% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 15% - Applies to the sale of food and beverages;

  • Reduced rate - 12% - Applies to passenger transport, accommodation, public broadcasting, and entry to cinemas, sporting events, amusement parks, and activity centers;

Russia VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions; 

  • Reduced rate - 10% - Applies to sale of food products, goods for children, periodicals and book products, and medical goods;

  • Zero rate - 0% - Applies to the sale of goods exported under the customs export procedure, as well as goods placed under the customs procedure of a free customs zone, international transportation services, and some other operations;

Serbia VAT Rates

  • Standard rate - 20% - Applies to  all taxable supplies of goods and services or import of goods;

  • Reduced rate - 10% - Applies to basic food, daily newspapers, medicines, publications, public transportation services, utilities;

  • Zero rate - 0% - Applies to the export of goods, transport, and other services directly related to exports;

Switzerland VAT Rates

  • Standard rate - 8.1% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 2.6% - Applies to goods for basic needs;

  • Special rate - 3.8% - Applies to accommodation services;

Turkey VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 10% - Applies to basic foodstuffs, textiles, books, and similar publications;

  • Reduced rate - 1% - Applies to agricultural products such as raw cotton, dried hazelnuts, supply and leasing of goods within the scope of the Finance Leasing Law;

Ukraine VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 14% - Applies to import and supply of certain agricultural products (products of plant origin, such as corn, soybeans, sunflower seeds, and certain other goods);

  • Reduced rate - 7% - Applies to temporary accommodation services, supply of tickets for sports events of international and Ukrainian level;

  • Zero rate - 0% -  Applies to the export and re-export of goods;

United Kingdom VAT Rates

  • Standard rate - 20% - Applies to all supplies of goods and services that aren’t part of the reduced or zero-rate scheme or exempted transactions;

  • Reduced rate - 5% - Applies to some goods and services, e.g., children’s car seats and home energy;

  • Zero rate - 0% - Applies to most food and children’s clothes;

Conclusion

Comprehensible and up-to-date knowledge of effective VAT rates is of pivotal relevance for operating in a tax-compliant manner. When the wrong rates are imposed on the underlying transaction, it creates a chain of mistakes that must be resolved as soon as possible because, inevitably, it will lead to many headaches. The non-adequate tax calculation will cause wrongful collection remittance from the angle of the tax authority. From the business side, it can lead to the impossibility of the purchaser deducting its input tax credit. 

By staying informed about these differences in VAT rates in Europe, businesses can ensure compliance with local VAT regulations, optimize their tax planning, and avoid potential penalties.

Are there any special VAT rules for certain territories?

Although countries tend to apply VAT rules at the federal or country level, this rule has some exemptions. One of those examples is Northern Ireland, which is part of the UK but, following Brexit and under the terms of the Northern Ireland Protocol, is treated as part of the EU for VAT and customs purposes solely concerning goods.

The following example can be found in Italy, where the Italian municipality of Campione d’Italia is included in the EU customs territory but is outside the scope of Italian VAT and the EU VAT area. There are other examples, some of which are mentioned in this guide.

What are the lowest and highest standard VAT rates in the EU?

In the EU, Luxembourg has the lowest standard VAT rate of 17%, and Hungary has the highest standard rate of 27%.

What are the types of VAT rates in the EU?

The EU has three main categories of VAT rates: standard, reduced, and special. The last one, the special rate, has three subtypes: super-reduced, zero rate, and intermediate rate.


Best Regards, Vatabout team