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
Austria 20 10 - 12
Belgium 21 6 - 12
Bulgaria 20 - - -
Croatia 25 10 5 -
Cyprus 18 5 - -
Czech Republic 21 15 - -
Denmark 25 - - -
Estonia 20 0 - 9 - -
Finland 24 10 - 14 - -
France 19.6 5.5 - 7 2.1 -
Germany 19 7 - -
Greece 23 13 6.5 -
Hungary 27 5 - 18 - -
Ireland 23 4.8 - 9 - 13.5 0 -
Italy 21 10 4  
Latvia 21 0 - 12 - -
Lithuania 21 0.5 - 9 - -
Luxembourg 15 6 3 12
Malta 18 5 - -
Netherlands 21 6 - -
Poland 23 8 5 -
Portugal 23 6 - 13 - -
Romania 24 9 - -
Slovak Republic 20 10 - -
Slovenia 22 9.5 - -
Spain 21 10 4 -
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.