Discover the current ‘vat rates by country’ for nations outside Europe that levy VAT or GST taxes globally. For information on European VAT rates, please visit our separate page by Clicking Here.
It’s important to note that ‘vat rates’ vary as not all countries implement Value Added Tax (VAT). In some nations, VAT is only applicable to specific goods and services, while in others, it’s a broad-based tax applied to most items. The implementation and rate of VAT, determined by each respective government, differ from country to country.
Understanding ‘vat rates by country’ includes knowing about reduced VAT rates, which can be influenced by temporary factors like COVID-19
Many countries implement multiple reduced VAT rates for diverse services or products. The primary purpose of these reduced VAT rates is to ease the financial burden on consumers, particularly for essential items. By applying a lower tax rate, governments aim to enhance affordability, especially for those with lower income. Typical items taxed at a reduced VAT rate for increased accessibility include food items, children’s clothing, and books.
Find out where and how you can search for VAT rates in our previous article by clicking Here .
|Country||Standard VAT/GST Rate||Reduced Rates|
|Algeria||The standard sales tax (VAT) rate is 19%.||A reduced rate of 9% applies to certain industries|
|Antigua and Barbuda||No VAT tax but standard sales tax is set at 15%||Reduced rate of 14%|
|Andorra||The standard rate is 4.5%, although a higher rate of 9.5% applies to banking and financial services.||Αndorra has three additional IGI rates: A reduced rate of 1%, a special rate of 2.5%|
|Argentina||The standard VAT rate is 21%. (enhanced rate of 27% for several metered utilities)||Reduced rate of 10.5%|
|Armenia||The standard VAT rate is 20%.|
|Aruba||There is no VAT as such in Aruba, although there have been calls from the International Monetary Fund for the introduction of such a levy. (A combined rate “GST” can be considered to be at 7%)|
|Australia||Australia has a Goods and Services Tax (GST) which is equivalent to a VAT. The standard GST rate is 10%.|
|Azerbaijan||The standard VAT rate is 18%.|
|Bahamas||Standard VAT rate of 10%|
|Bahrain||From January 1, 2022, the standard VAT rate is 10%.|
|Bangladesh||The standard VAT rate is 15%.||10%, 7.5%, 5%, 2,4%, 2%|
|Barbados||The standard VAT rate is 17.5% (Super rate of 22% mobile voice & text services)||A reduced rate of 10% applies to the provision of hotel accommodation|
|Belize||There is no value-added tax as such. Belize instead introduced a General Sales Tax in January 2006, which applies to a wide range of goods and services at a 12.5% rate.|
|Bermuda||There is no VAT in Bermuda.|
|Bolivia||The standard VAT (IVA) rate is 13% under Article 15 of the VAT Law|
|Botswana||Since April 2023 the standard VAT rate is 14%|
|Brazil||Brazil imposes a state tax equivalent to VAT (ICMS) This rate is imposed by each state and is subject to a limit set by the federal senate. The rates can vary in the states from 17% to 18% (Rio de Janeiro has 20% as an exception). and the highest rate can typically reach 25%.||7%|
|British Virgin Islands||There is no VAT in the British Virgin Islands.|
|Brunei||There is no VAT in Brunei.|
|Bulgaria||The standard VAT rate is 20%.||A reduced VAT rate of 10% applies to hotel accommodation and the tourism sector|
|Canada||The standard federal Goods and Services Tax (GST) rate is 5%|
|Cayman Islands||There is no VAT in the Cayman Islands.|
|Chile||The standard VAT rate is 19%.|
|China||The standard VAT rate is 13%, 9%, 6%||Reduced rates of 5%, 2%, 3%, 1.5% and 0.5%.|
|Colombia||The standard VAT (IVA – Impuesto sobre las Ventas) rate is 19%||5%|
|Cook Islands||The standard VAT rate is 15%,|
|Costa Rica||The standard VAT rate is 13%, the same rate as the sales tax.||4%, 2%, 1%|
|Curaçao||There is no VAT in Curaçao. (Sales tax is 6% with enchanced rates of 7& and 9%)|
|UAE||VAT is charged at 5% in the United Arab Emirates (UAE)|
|Ecuador||The standard VAT rate is 12%|
|Egypt||The VAT rate is 14%||5%|
|El Salvador||The standard VAT (IVA) rate is 13%|
|Equatorial Guinea||The standard VAT rate is 15%||6%|
|Ethiopia||The standard VAT rate is 15%|
|Faroe Islands||The standard VAT rate is 25%|
|Georgia||The standard VAT rate is 18%|
|Gibraltar||There is no VAT in Gibraltar.|
|Guatemala||The standard VAT rate is 12%|
|Guernsey||There is no VAT in Guernsey|
|Hong Kong||There is no VAT or sales tax in Hong Kong.|
|India||The primary rates of Indian GST are 0.25%, 1.5%, 3%, 5%, 12%, 18% and 28%|
|Indonesia||The standard VAT rate is 11%|
|Iraq||There is no VAT in Iraq. (The standard sales tax ranges from 9% to 300% on alcohol & tobacco)|
|Isle of Man||The standard rate of VAT is 20%||5%|
|Israel||The standard VAT rate is 17%|
|Japan||The standard (Consumption Tax) rate is 10%||8%|
|Jersey||The standard Goods and Services Tax (GST) rate is 5%.|
|Kazakhstan||The standard rate of VAT is 12%|
|South Korea||The standard VAT rate is 10%|
|Kuwait||There is no VAT in Kuwait|
|Malaysia||On September 1, 2018, the Government of Malaysia replaced the Goods and Services Tax (GST) with a 10% Sales Tax (The standard rate of service tax is 6%)||5% (Sales Tax)|
|Mauritania||The standard VAT rate is 16%|
|Mauritius||The standard VAT rate is 15%|
|Mexico||The standard VAT rate is 16%||8%|
|Morocco||The standard VAT rate is 20%||7% 10% 14%|
|New Zealand||The standard Goods and Services Tax (GST) rate is 15%|
|Nigeria||The standard VAT rate is 7.5%|
|Oman||the standard VAT rate in Oman is 5%|
|Pakistan||Pakistan does not have VAT. The standard sales tax rate is 18%||Pakistan has a large number of reduced sales tax rates, including 1%, 2%, 5%, 10% and 12% (among others).|
|Panama||The standard VAT rate in Panama is 7% and there are supplementary rates of 10% and 15%|
|Peru||The standard VAT rate is 18%||Effective September 1, 2022 until December 31, 2024, a 8% reduced rate will apply to micro and small suppliers of restaurant, hotel, and tourist accommodation services that receive at least 70% of their income from these supplies.|
|Philippines||The standard VAT rate is 12%|
|Puerto Rico||The sales and use tax (SUT) rate is 11.5%||1%|
|Qatar||There is no VAT in Qatar|
|Russia||The standard VAT rate is 20%||10%|
|Saudi Arabia||VAT is charged at 15%|
|Singapore||The standard Goods and Services Tax (GST) rate is 8%|
|Taiwan||The standard VAT rate is 5%|
|Tanzania||The standard VAT rate is 18%|
|Thailand||The standard VAT rate is 7% (Reduced from the standard 10% until 30 September 2023)|
|Tunisia||The standard VAT rate is 19%||7%, 13%|
|Turkey||The standard VAT rate is 20%||10%, 1%|
|Turks and Caicos||There is no VAT in Turks and Caicos|
|Ukraine||The standard VAT rate is currently 20%||7%, 14%|
|Uganda||The standard VAT rate is 18%|
|United Kingdom||The standard VAT rate is 20%||5%|
|Uruguay||The standard VAT rate is 22%||10%|
|USA||There is no VAT in the USA. U.S. state sales and use tax rates vary between 2.9% and 7.25%||Reduced rates are offered for sales of specific products.|
|Uzbekistan||The standard VAT rate is 12%|
|Vanuatu||The standard VAT rate is 15%|
|Venezuela||The standard VAT rate is 16%||8%|
|Vietnam||The standard VAT rate is 10%||Reduced VAT rate is 5%|
The highest standard VAT (Value Added Tax) rate in the world is 27% in Hungary. Some other countries, such as Sweden, have a standard VAT rate of 25%.
The Bahamas have a standard VAT rate which is set at 10%. Canada has a standard federal GST rate of 5% while Luxembourg has the lowest VAT rate in the EU with 16%
Another reason for reduced VAT rates is to stimulate economic growth. By reducing the tax rate on certain items, the government aims to increase consumption and encourage spending. This, in turn, can lead to job creation and a boost in the economy. For example, reduced VAT rates on construction services can encourage people to invest in home improvement projects, leading to an increase in economic activity in the construction sector.
Additionally, reduced VAT rates can also help small businesses. By reducing the tax rate on certain goods and services, the government can help these businesses to remain competitive, especially against larger companies that have more resources at their disposal. Small businesses can also benefit from reduced VAT rates by attracting more customers and boosting their sales.
In conclusion, reduced VAT rates play an important role in supporting consumers and businesses, particularly those on low incomes or small businesses. By reducing the tax rate on essential items and services, governments aim to make them more affordable and accessible for everyone, while also providing a boost to the economy.
Yes, EU VAT rates must adhere to the EU directives for example the Standard VAT rate cannot be less than 15% when in countries outside the EU we can often find rates below 15% like Bahrain where the VAT rate is at 5%.
There is a difference in the name of the tax as VAT stands for Value Added Tax while GST stands for Goods and Services Tax. Other than the name these two taxes share a lot of the same characteristics and they can be considered to have a similar effect. Most of the countries use VAT but some countries such as Australia and India use GST.
VAT has been used successfully for many years as it really provides a further incentive to companies to register and keep invoices. Value-added tax avoids the cascade effect of sales tax by taxing only the added value gained at each stage of production. For this reason, throughout the world, VAT has been gaining favour over traditional sales taxes.
VAT (Value Added Tax) is considered a good way to tax because it is a consumption tax, which means it is levied on goods and services as they are purchased by consumers. This results in a more efficient and fair tax system, as it primarily affects those who can afford to consume more goods and services, while having a lesser impact on low-income individuals.
Additionally, VAT is a simple and transparent tax system, as it is charged at each stage of production and distribution, allowing for easier tax administration and enforcement. VAT can also increase government revenue, as it encourages businesses to register and participate in the tax system, while reducing the incentive for tax evasion and avoidance.
Overall, VAT is a good way to tax because it is a consumption tax that is simple, transparent, and efficient, and it can increase government revenue.
Many countries have adopted temporary reduced VAT rates in order to help their economies bounce back from the COVID19 aftermath. Learn all about the latest updated by following our VAT news section by clicking here and by subscribing to our monthly VAT newsletter.