Table of VAT Rates in the European Union, as well as in Norway, Switzerland, and the United Kingdom
Countries | 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% | – | – | – |
Finland | 25,5% | 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 | 23% | 19% | 5% | – | – |
Slovenia | 22% | 9,5% | 5% | – | – |
Sweden | 25% | 6% | 12% | – | – |
Switzerland | 8,1% | 2,6% | 3,8% | – | – |
* Estonia plans another increase in its standard VAT rate from 22% to 24%. This measure is expected to take effect in July 2025.
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Main VAT Rate Changes in 2025
VAT Rate in Finland
Finland’s standard VAT rate increases from 24% to 25.5%. This measure took effect on September 1, 2024.
VAT Rate in Slovakia
Slovakia’s standard VAT rate increases from 20% to 23%. This measure took effect on January 1, 2025.
VAT Rate in Estonia
Estonia plans another increase in its standard VAT rate from 22% to 24%. This measure is expected to take effect in July 2025.
Why Such Differences in VAT Rates Between European Union Countries?
In the European Union, VAT rates are not standardized. However, each member state must comply with specific rules when determining applicable rates.
Directive 2006/112/EC, recently reformed by Directive 2022/542:
- Requires member states to apply a standard rate of at least 15%.
- Allows member states to apply up to two reduced rates above 5% on 24 types of goods or services listed in Annex III.
- Grants them the possibility to apply a reduced rate below 5% and an exemption with the right to deduct VAT upstream on 7 specific types of goods or services listed in Annex III.
- Permits them to apply reduced rates above 12% on the same goods or services to which these rates were applicable in other member states as of January 1, 2021, under the same conditions.
Member states have until January 1, 2032, to fully align their legislation with these requirements.
What Are the Risks of Incorrect VAT Application?
Fiscal Risk When Applying a Lower VAT Rate
During a tax audit, authorities may reassess the uncollected VAT, imposing penalties and late payment interest.
Fiscal Risk When Applying a Higher VAT Rate
Even in this case, a tax audit can result in reassessment and financial sanctions, including penalties and late payment interest.
We mainly encounter two risks:
- The Taxable Client (a Business) Cannot Deduct Incorrectly Charged VAT
Example: A French company makes a taxable sale worth €25,000 (excluding VAT) in Italy. By mistake, the company applies a standard VAT rate of 22% instead of the reduced rate of 4% applicable to these products.
The company pays €5,500 in VAT instead of €1,000. The client may be denied the right to deduct the €4,500 VAT overpayment.
- The Non-Taxable Client (an Individual) Ends Up Paying More
Example: A French e-commerce business exceeds €10,000 in revenue and sells books to individuals in other EU countries.
By mistake, the company applies a 22% VAT rate in Italy instead of the correct 4% rate on a book sale worth €500 (excluding VAT).
The client, who should have paid €520 (including VAT), ends up paying €610 instead.
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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