Making Sense of VAT rates in Europe
In the European Union, VAT transactions are subject to rates imposed by the EU country to which the goods or services are being supplied. However, despite the standard rate of 15%, EU countries may set VAT rates as they wish according to agreed rules. This means that, in practice, there are many regulations and varying VAT rates across Europe creating a labyrinth for business owners. The EU allows a number of categories of goods to be taxed at different rates by EU countries, including products such as:
- Foodstuffs and non-alcoholic beverages for human and animal consumption
- Water supplies
- Pharmaceutical products, medical equipment, provision of medical and dental care as well as thermal treatment
- Transport of passengers and their accompanying luggage
- Books, newspapers and periodicals
- Admissions to shows and sporting events.
- Services supplied by or royalties due to writers, composers and performing artists.
- Supply, construction, renovation and alteration of housing provided as a part of a social policy.
- Supplies of goods and services of a kind normally intended for use in agricultural production but excluding capital goods such as machinery or buildings.
- Accommodation provided by hotels and similar establishments
- Use of sporting facilities.
- Supply of goods and services to recognized charities
- Services supplied by undertakers and cremation services,
- Services supplied in connection with street cleaning, refuse collection and waste treatment.
|EU country||Standard||Reduced||Super Reduced||Parking|
|Estonia||20||0 - 9||-||-|
|Finland||24||10 - 14||-||-|
|France||19.6||5.5 - 7||2.1||-|
|Hungary||27||5 - 18||-||-|
|Ireland||23||4.8 - 9 - 13.5||0||-|
|Latvia||21||0 - 12||-||-|
|Lithuania||21||0.5 - 9||-||-|
|Portugal||23||6 - 13||-||-|
|Sweden||25||6 - 12||-||-|
|United Kingdom||20||0 - 5||-||-|
Apart from these ranges there are a number of Territories in the EU where VAT is excluded completely or where very low rates apply. VAT planning is a crucial part of our services offer both for companies wanting to develop business in Europe and firms wanting to effectively plan their taxes.