List of VAT Rates in the European Union, Norway, Switzerland, and the United Kingdom
Country | Standard rate | Reduced rate 1 | Reduced rate 2 | Super-Reduced rate | Parking rate |
Austria | 20% | 10% | 13% | – | 13% |
Belgium | 21% | 6% | 12% | – | 12% |
Bulgaria | 20% | 9% | – | – | – |
Croatia | 25% | 5% | 13% | – | – |
Cyprus | 19% | 5% | 9% | – | – |
Czech Republic | 21% | 12% | – | – | – |
Denmark | 25% | – | – | – | – |
Spain | 21% | 10% | – | 4% | – |
Estonia | 22% | 9% | 5% | – | – |
Finland | 24% | 10% | 14% | – | – |
France | 20% | 5,5% | 10% | 2,1% | – |
Germany | 19% | 7% | – | – | – |
Greece | 24% | 6% | 13% | - | – |
Hungary | 27% | 5% | 18% | – | – |
Ireland | 23% | 9% | 13,5% | 4,80% | 13,5% |
Northern Ireland | 20% | 5% | – | – | – |
Italia | 22% | 10% | 5% | 4% | – |
Latvia | 21% | 12% | 5% | – | – |
Lithuania | 21% | 5% | 9% | – | – |
Luxembourg | 17% | 8% | 14% | 3% | 12% |
Malta | 18% | 5% | 7% | – | – |
Norway | 25% | 15% | 12% | – | – |
Netherlands | 21% | 9% | – | – | – |
Poland | 23% | 5% | 8% | – | – |
Portugal | 23% | 6% | 13% | – | 13% |
Romania | 19% | 5% | 9% | – | – |
United Kingdom | 20% | 5% | – | – | – |
Slovakia | 20% | 10% | – | – | – |
Slovenia | 22% | 9,5% | 5% | – | – |
Sweden | 25% | 6% | 12% | – | – |
Switzerland | 8,1% | 2,6% | 3,8% | – | – |
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Summary of VAT rate changes in 2024
Estonia
The standard VAT rate increases from 20% to 22%.
Luxembourg
- The standard VAT rate increases from 16% to 17%.
- The reduced rate increases from 7% to 8%.
- The second reduced rate increases from 13% to 14%.
Czech Republic
- The two reduced rates of 10% and 15% are abolished.
- A single reduced rate of 12% is introduce.
Switzerland
- The standard VAT rate increases from 7,7% to 8,1%.
- The reduced rate increases from 2,5% to 2,6%.
- The second reduced rate increases from 3,7% to 3,8%.
Other VAT Rate Changes to be anticipated in 2024 and 2025
Finland
Effective September 1, 2024, the standard VAT rate will increase from 24% to 25,5%.
Estonia
Effective July 1, 2025, the standard VAT rate will increase from 22% to 24%.
At present, this government announcement has not yet been adopted.
Why are VAT rates so different across EU countries?
VAT rates are currently not harmonized within the EU. However, member states must follow some rules regarding applicable rates.
Directive 2006/112/EC, recently reformed by Directive 2022/542, stipulates that member states:
- Must apply a standard rate of minimum 15%.
- May apply two reduced rates higher than 5% on 24 types of products or services listed in Annex III.
- May apply a reduced rate below 5% and an exemption with the right to deduct input VAT on 7 types of certain goods or services listed in Annex III.
- May apply reduced rates higher than 12% on the same goods or services as those to which these rates applied in other member states as of January 1, 2021.
Member states have until January 1st, 2032, to fully comply with these rules.
When an I affected by foreign VAT Rates?
Here are a few examples of transactions for which your company may be affected by applicable foreign VAT rates:
- E-commerce activity: distance sales to individuals located in another EU country (EU businesses with turnover above EUR 10,000).
- Domestic purchases in a foreign country with local storage.
- Sales and deliveries of goods from a stock held abroad to a local customer.
- Purchase-resale abroad with direct delivery between supplier and final local customer.
- Services related to a property located in a foreign country.
- Sale of access rights to events held abroad (e.g., sports ticketing for football matches in Spain).
For some of these operations, a study of local regulations is necessary to determine if a simplification mechanism can apply (e.g., reverse charge mechanism between taxable persons as provided in Articles 194 or 199 bis of Directive 2006/112/EC).
What are the risks of applying the wrong VAT Rate
Tax risk of applying a lower VAT rate
In case of an audit, the tax authorities may reassess the uncollected VAT and apply penalties and interest for late payment.
Tax risk of applying a higher VAT Rate
In case of an audit, the tax authorities may reassess the uncollected VAT and apply penalties and interest for late payment.
Two main risks are identifiable :
- The taxable customer (a company) will not be able to deduct the wrongly invoiced VAT.
Example: A French company carries out a transaction worth EUR 10,000 excl. tax, taxable in Germany. The company wrongly applies a standard rate of 19% to its sales invoice, whereas the transaction is eligible for the reduced rate of 7%. The amount of VAT paid by the German company amounts to 1900 euros instead of 700 euros. The customer may be denied a deduction right of EUR 1,200 of erroneously paid VAT.
- Non-taxable customers (private individuals), who pay VAT as an expense, will pay more for a product including VAT than they should
Example: A French e-commerce merchant with a turnover above EUR 10,000 sells goods to individuals in other EU countries. The company erroneously applies a 17% VAT rate on children’s clothing in Luxembourg instead of 3%. The customer, who could have paid 103 euros (incl. VAT) for the product, will finally pay 117 euros (incl. VAT).
Discover our services
VAT Solutions offers a range of services to assist you with your VAT-related challenges in France and internationally:
- Diagnostic of your VAT organization, your flows, and the methods for preserving proof of exempt operations, as well as assessing the impact of new VAT rules
- Confirmation of the VAT treatment of your flows;
- Coaching/training;
- Management of VAT obligations in Luxembourg and abroad: assistance, preparation, and submission of VAT identification requests and VAT returns.
Contact us
Phone number: + 33 6 12 37 32 22
Mail: info.fr@vat-solutions.com
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