2025 VAT Rates in Europe: Country Rates & Changes

As an online seller in Europe, understanding VAT (Value Added Tax) is important for your business operations. The EU sets a VAT framework, but each member state manages its own VAT collection and enforcement. This makes sure that VAT is collected in a fair and consistent way across the EU, while also giving member states flexibility in setting their own VAT rates.

VAT is charged at every step of your supply chain, from inventory buying to final sales. Standard rates in European markets usually set between 17% and 27%, with multiple levels of taxation:

• Standard rate: Applies to most products you'll sell

• Reduced rate: For specific categories like books or food items

• Super reduced rate: Available in some countries for essential goods

This guide will help you understand the current VAT rates across Europe.

The 2025 VAT Rate Changes (from 2024)

Slovakia

From 1 January 2025, the standard and reduced VAT rates in Slovakia have been increased:

Standard rate: 23% (up from 20%);

Reduced rate: 19% (up from 10%): applicable to foodstuffs other than basic foods and electricity

Super-reduced rate: it remains at 5% but new products are added to the list, such as:

● Basic foodstuffs,

● Pharmaceutical products,

● Medical devices,

● Books and printed materials

Estonia

From 1 January 2025, the VAT rate for press publications in Estonia has raised to 9% (up from 5%), and the VAT rate for accommodation services and accommodation services with breakfast are taxed at 13% (up form 9%)

The standard rate will increase to 24% (up from 22%) in July 2025.

Take a look at the official information.

Spain

On December 31, 2024, the temporary reduction of VAT on basic foodstuffs in Spain ceased to apply. Therefore, the rates applicable as from 1 January 2025 are as follows:

● Basic products such as bread, flour, milk, cheese, eggs, fruits, vegetables, legumes and cereals: 4% (up from 2%)

● Olive oil: 4% (up from 2%)

● Seed oils and pasta: VAT at 10% (up from 7,5%)

Cyprus

The zero VAT rate applies to a range of basic food and other products in Cyprus until 31 December 2025, including:

● Baby milk,

● Baby and adult diapers,

● Female hygiene products,

● Fresh or chilled vegetables and

● Fresh fruits

Netherlands

From 1 January 2025, The Netherlands moved certain agricultural goods from the reduced rate to the standard rate. The adjustment details include:

Increasing the VAT rate to 21% (from 9%), apply to non-food grains and legumes, seed potatoes for fruit and vegetable cultivation, feathered livestock, offal, beet roots, agricultural and horticultural seeds, round wood, straw, animal feed, flax, and wool.

Find here the official information.

Switzerland

Starting 1 January 2025, menstrual hygiene products will be taxed at the reduced VAT rate of 2.6% (down from the standard rate of 8.1%): including tampons, sanitary towels, panty liners, menstrual cups, and similar items.

Finland

Further changes are implemented to extend the list of goods and services at reduced rate of 14% by 1 January 2025.

European VAT Rates by Country (2025)

Want to check how VAT rates changed from last year? You can compare 2025 rates with 2024 rates here. This helps you make sure your past VAT reports were correct.

Which country in the Europe has the highest and the lowest VAT rate?

The European countries with the highest standard VAT rates are Hungary (27%), Finland (25.5%) and Croatia, Denmark, Norway, and Sweden (all at 25%). Luxembourg levies the lowest standard VAT rate at 17%, followed by Malta (18%) and Cyprus, Germany, and Romania (all at 19%). The EU’s average standard VAT rate is 21.8%, nearly 7% higher than the minimum standard VAT rate required by EU regulation.

Among the European countries that are not part of the European Union—Iceland, Norway, Switzerland, Turkey, and the United Kingdom—only Switzerland levies a standard VAT rate below the EU minimum at a rate of 8.1%.

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%.

Are all VAT rates the same in all EU countries?

VAT rates vary throughout Europe, with standard VAT rates ranging 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.

Why All EU Countries Use VAT?

The VAT system serves as a cornerstone of EU economies, generating consistent revenue for governments. Unlike other tax systems, VAT applies at each production and distribution stage, with the end consumer paying the final amount. This way proves highly efficient because it creates a reliable income stream, encompasses most goods and services, and presents fewer opportunities for tax evasion compared to other systems. The VAT system's consumption-based nature promotes fairness in taxation, as people contribute based on their purchasing decisions.

Why VAT is Important for Online Sellers?

For online sellers, proper VAT management directly influences business operation in the EU market. Understanding and following VAT regulations isn't optional - it's a fundamental requirement for legal operation in the European e-commerce space. Each EU country establishes specific thresholds that trigger mandatory VAT registration, and some nations requiring immediate registration regardless of sales volume. The registration process varies by country, with distinct deadlines and procedures that sellers must carefully monitor and follow.

Key compliance requirements include:

Regular VAT returns (monthly, quarterly, or annual)

Precise transaction records

Correct VAT rates on invoices

Proper documentation retention

Operating without proper VAT compliance can lead to severe consequences for your business. Tax authorities across the EU actively monitor online sellers and enforce regulations strictly. Financial penalties for non-compliance often reach thousands of euros, while continued violations can result in marketplace suspension or permanent removal. More serious cases may lead to legal proceedings, requiring back-payment of unpaid VAT plus substantial interest. Beyond immediate financial impacts, non-compliance can damage your business reputation and, in extreme cases, result in criminal charges.

Maintaining VAT compliance not only protects your business from these risks but also positions you for sustainable growth in the EU market. By understanding and following VAT regulations from the start, you create a strong foundation for your European e-commerce operations while avoiding costly penalties and business disruptions. Contact our VAT experts for a free consultation on your specific VAT requirements.

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