Global VAT Compliance offers a brief overview of VAT rates across Europe in 2023. These VAT rates are updated frequently. Below you can find both standard VAT rates as well as reduced rates per country for all European countries.
Contact GVC for any aspect of your VAT compliance internationally. Our experts will be happy to provide a first assessment for your business.
When the European Union (EU) was in its infancy, the Value-Added Tax (VAT) system was introduced with a standard rate of 10%. This was a significant milestone in the EU’s economic history, marking the beginning of a unified approach to taxation. This standard rate was uniformly applied across all EU member states, creating a level playing field for businesses and consumers alike. France led the way, becoming the first country to implement this new tax system.
As the years passed, the VAT system matured and evolved, reflecting the changing economic landscape of the EU. The standard rate of 10% gradually increased, adapting to the economic needs and realities of the member states. This evolution of VAT rates was not just a matter of increasing percentages; it was a testament to the EU’s ability to adapt and respond to economic changes and challenges.
Today, the VAT system in the EU is far more nuanced and complex than it was at its inception. Different VAT rates are now applied to different types of goods and services within each member state. This variation in VAT rates reflects the diverse economic environments and policy priorities of each member state. It’s a clear indication of how the EU has evolved from a one-size-fits-all approach to a more tailored, flexible system that can meet the unique needs of each member state while still maintaining a unified economic area.
Standard VAT Rates
Reduced VAT Rates
|VAT rate in Austria||The standard VAT rate is 20%.||Austria applies a 13% intermediate VAT rate to certain supplies, including domestic air travel, while a reduced VAT rate of 10% is applied to supplies such as rental of real estate.|
|VAT rate Belgium||The standard VAT rate is 21%.||Belgium enforces two reduced rates – the “First Reduced Rate” at 6% and the “Second Reduced Rate” at 12%. These rates apply to a restricted range of transactions.|
|VAT rate Bulgaria||The standard VAT rate is 20%.||As per Article 66a of the VAT Law, the reduced VAT rate in Bulgaria stands at 9%.|
|VAT rate Croatia||The standard VAT rate is 25%.||The Croatian VAT Act stipulates a first reduced rate of 13% and a second reduced rate of 5%.|
|VAT rate in Cyprus||The standard VAT rate is 19%.||The first reduced rate of 9% and second reduced rate of 5% are stated in Articles 18 and 18A of the VAT Law for certain goods and services.|
|VAT rate in Czech Republic||The standard VAT rate is 21%.||The Czech VAT Act’s Article 47 includes two reduced rates of Value Added Tax – the initial one being 15%, while the secondary one being 10%.|
|VAT rate in Denmark||The standard VAT rate is 25%.|
|VAT rate in Estonia||The standard VAT rate is 20%.||In accordance with Section 15 of the Estonian VAT Act, there are two reduced rates for Value Added Tax – the primary one being 9%, and the secondary one being 5%.|
|VAT rate in Finland||The standard VAT rate is 24%||There are two reduced rates for Value Added Tax in Finland; the first reduced rate stands at 14%, while the second reduced rate is 10%.|
|VAT rate in France||The standard VAT rate is 20%.||The General Tax Code’s Article 278-0 bis and subsequent provisions outline three different rates for Value Added Tax. An intermediate rate of 10%, a primary reduced rate of 5.5%, and a secondary reduced rate of 2.1% are included.|
|VAT rate in Germany||The standard VAT rate is 19%||As of January 1, 2021, the German VAT Act’s §12 designates a reduced rate of 7% for Value Added Tax in Germany.|
|VAT rate in Greece||The standard VAT rate is 24%||Annex III of the Greek VAT Code designates specific supplies of goods and services that are subject to reduced rates of Value Added Tax. Article 21 of the same code specifies that a reduced rate of 13% and a super-reduced rate of 6% apply to these supplies.|
|VAT rate in Hungary||The standard VAT rate is 27%.||Various supplies are subject to a reduced VAT rate of 5% and an intermediate VAT rate of 18%, as stipulated by Article 82 of the Hungarian VAT Act|
|VAT rate in Ireland||The standard VAT rate is 23%.||In Ireland, Section 46 of the VAT Act and Schedule 3 outline three reduced rates for Value Added Tax that apply to specified supplies. These include a primary reduced rate of 13.5%, a secondary reduced rate of 9%, and a tertiary reduced rate of 4.8%.|
|VAT rate in Italy||The standard VAT rate is 22%||Italy’s Value Added Tax system includes three reduced rates, which are referred to as the “first reduced rate,” “second reduced rate,” and “super-reduced rate.” Specifically, these rates stand at 10%, 5%, and 4%, respectively.|
|VAT rate in Latvia||The standard VAT rate is 21%.||According to Article 42 of the Latvian VAT Law, two different reduced rates of Value Added Tax are available, known as the “First Reduced Rate” and the “Second Reduced Rate.” These rates stand at 12% and 5%, respectively, but specific conditions and requirements apply. Essential supplies, such as registered medications and baby food, fall under the First Reduced Rate, while fresh produce, printed materials, and electronic literature and publications generally fall under the Second Reduced Rate.|
|VAT rate in Lithuania||The standard VAT rate is 21%.||The Lithuanian VAT Law’s Article 19 outlines two different reduced rates for Value Added Tax. The “First Reduced Rate,” which stands at 9%, applies to specific supplies, such as residential heating and print publications. Meanwhile, the “Second Reduced Rate,” which is 5%, applies to particular goods and services that are related to medicine and health.|
|VAT rate in Luxembourg||Starting from January 1, 2023, until December 31, 2023, the standard rate of Value Added Tax in Luxembourg will be 16%, as per Article 39 of the Luxembourg VAT Law.||Effective from January 1, 2023, until December 31, 2023, Article 39 of the Luxembourg VAT Law specifies that different rates of Value Added Tax will apply. The intermediate reduced rate of VAT is 13%, the reduced rate is 7%, and the super-reduced rate is 3%.|
|VAT rate in Malta||The standard VAT rate is 18%.||In accordance with the VAT regulations stated in the Maltese VAT Act’s Eighth Schedule, there exists two reduced VAT rates; the first at 7% and the second at 5%.|
|VAT rate in Monaco||The standard VAT rate is 20%.||The Tax Code’s Articles 52-0 to 59 dictate the application of varied VAT rates in Monaco, specifically an intermediate rate of 10%, a first reduced rate of 5.5%, and a second reduced rate of 2.1%.|
|VAT rate in The Netherlands||The standard VAT rate is 21%||Article 9 of the Dutch VAT Act designates certain supplies that are eligible for a reduced VAT rate of 9%.|
|VAT rate in Poland||The standard VAT rate is 23%.||Goods and services falling under specific categories are subject to a first reduced rate of 8% and a second reduced rate of 5%.|
|VAT rate in Portugal||The standard VAT rate is 23%||As stated in Article 18 of the Portuguese VAT Code, a reduced VAT rate of 6% (5% in Madeira and 4% in the Azores) and an intermediate VAT rate of 13% (12% in Madeira and 9% in the Azores) are applicable.|
|VAT rate in Romania||The standard VAT rate is 19%.||The Romanian VAT Code’s Article 291 outlines a First Reduced rate of 9% and a Second Reduced rate of 5%.|
|VAT rate in Slovakia||The standard VAT rate is 20%.||Supplies such as basic food items and pharmaceutical products are eligible for a reduced VAT rate of 10% in accordance with Section 27, Annex 7, and Annex 7a of the Slovakian VAT Act.|
|VAT rate in Slovenia||The standard VAT rate is 22%.||In compliance with Article 41 of the Slovenian VAT Act, a first reduced rate of 9.5% and a second reduced rate of 5% are available.|
|VAT rate in Spain||The standard VAT rate is 21%||Under Article 91 of the Spanish VAT Act, a reduced VAT rate of 10% is granted to specific agricultural supplies, while a super-reduced rate of 4% applies to supplies such as books.|
|VAT rate in Sweden||The standard VAT rate is 25%.||Chapter 7, Section 1 of the Swedish VAT Act stipulates that a first reduced rate of 12% is applicable to supplies that include foodstuffs, while a second reduced rate of 6% is applicable to supplies that include books and other publications.|
|VAT rate in the UK||The standard VAT rate is 20%.||Article 29A and Schedule 7A of the VAT Act 1994 specify certain supplies that are eligible for a reduced VAT rate of 5%.|
Value Added Tax (VAT) is an indirect tax levied on goods and services across Europe and worldwide. The European Union (EU) has mandated VAT tax for all its member states, which are required to implement and enforce it in accordance with the EU VAT code.
The EU itself does not directly collect VAT tax; instead, it has established a comprehensive VAT code that regulates the collection and enforcement of VAT by each member state. This ensures consistency and fairness in VAT collection across the EU, while allowing member states some flexibility in setting their own VAT rates.
The VAT system functions by imposing a tax on goods and services at each stage of the supply chain, with the final consumer bearing the cost. VAT rates may differ depending on the type of goods or services, and some member states offer reduced rates for specific product categories.
To promote fairness and transparency in VAT collection, the EU has introduced measures such as cross-border information sharing and increased transparency. These measures aim to establish a level playing field for businesses and reduce opportunities for VAT fraud.
Luxembourg has currently the lowest VAT rate with a VAT rate of 17%. Each EU member state decides on the percentage of VAT (Value added tax) tax on the of goods and services. This tax is meant to be applied on the added value that the specific business adds to the service or goods. Each state can decide on the VAT tax but EU law prohibits VAT to be set below 15% and at the same time one of the two reduced rates needs to be above 5%.
VAT rates are not the same throughout Europe as the standard VAT rates range from 17% to 27%. As mentioned before Luxembourg has the lowest VAT rate of 17% and Hungary has the highest VAT rate with 27%
VAT is also known in some countries as GST (Goods and services tax) and it is levied on the price of a product or service at each stage of the production distribution and sale.
The VAT collected is the difference between the VAT on the sales and the VAT on the purchase of the services or goods.
All European Union (EU) countries use Value Added Tax (VAT) as it is an efficient way to generate revenue for the government. VAT is a consumption-based tax that is imposed on goods and services at every stage of production, with the final consumer ultimately bearing the cost. It is a broad-based tax that applies to almost all goods and services, making it a reliable source of revenue for governments.
Each country has also introduced reduced VAT rates in certain products, supplies or services such as food products, hospitality and medical equipment during the COVID19 pandemic. Especially during 2020 – 2022 many new temporary reduced rates where introduced to help businesses and individuals who were affected by COVID19. Get updated about all new changes in rates or country policies in regards to Covid19 in our VAT updates section by clicking here.
VAT (Value Added Tax) is also used internationally in countries such as Israel, Indonesia, Malaysia, Mexico etc. Should you wish to get information on Global VAT rates you can do so by visiting our page here.