VAT (Value Added Tax) is a consumption tax that applies when you buy goods and services in Europe. The VAT is added at each step of making and selling products. The final consumer pays the total VAT amount in the purchase price. Each country sets its own VAT rates, which normally between 15% and 27%.

Most European countries have a multi-level VAT system:

Standard rate: for most goods and services;

Reduced rate: for specific items like food or books;

Super reduced rate: for essential items in some countries.

In 2024, several European countries have updated their VAT rules to adapt to changing economic needs. These changes affect both businesses and consumers who buy or sell across Europe. This guide helps you understand the VAT rates in Europe.

The European VAT Rate Changes for 2024

Luxembourg VAT rate changes in 2024

Applicable from January 1, 2024:

• Standard rate: 17% (up from 16%)
• Intermediate rate: 14% (up from 13%)
• Reduced rate: 8% (up from 7%)

Czech Republic VAT rate changes in 2024

Applicable from January 1, 2024:

• Reduced rate: 12% (consolidated from previous 10% and 15%)

Estonia VAT rate changes in 2024

Applicable from January 1, 2024:

• Standard rate: 22% (up from 20%)

Switzerland VAT rate changes in 2024 and plans for 2026

Applicable from January 1, 2024:

• Standard rate: 8.1% (up from 7.7%)
• Reduced rate: 2.6% (up from 2.5%)
• Hotel accommodation rate: 3.8% (up from 3.7%)

To support pension finances, The Swiss Federal Council has announced plans to raise the VAT rates applicable in 2026:

• Standard VAT rate from the current 8.1% to 8.8%
• Reduced rate from 2.6% to 2.8%
• Hotel accommodation rate from 3.8% to 4.2%

European VAT Rates by Country (2024)

VAT rates vary by product and service type across European countries. Certain categories of goods and services qualify for various reduced rates.

Austria - Standard rate: 20% | Reduced rate: 10%, 13%

Belgium - Standard rate: 21% | Reduced rate: 6%, 12%

Bulgaria - Standard rate: 20% | Reduced rate: 9%

Croatia - Standard rate: 25% | Reduced rate: 5%, 13%

Cyprus - Standard rate: 19% | Reduced rate: 5%, 9%

Czech Republic - Standard rate: 21% | Reduced rate: 12%

Denmark - Standard rate: 25%

Estonia - Standard rate: 22% | Reduced rate: 9%

Finland - Standard rate: 24% | Reduced rate: 10%, 14%

France - Standard rate: 20% | Reduced rate: 5.5%, 10% | Super Reduced rate: 2.1%

Germany - Standard rate: 19% | Reduced rate: 7%

Greece - Standard rate: 24% | Reduced rate: 6%, 13%

Hungary - Standard rate: 27% | Reduced rate: 5%, 18%

Ireland - Standard rate: 23% | Reduced rate: 9%, 13.5% | Super reduced rate: 4.80%

Italy - Standard rate: 22% | Reduced rate: 10%, 5% | Super reduced rate: 4%

Latvia - Standard rate: 21% | Reduced rate: 12%, 5%

Lithuania - Standard rate: 21% | Reduced rate: 5%, 9%

Luxembourg - Standard rate: 17% | Reduced rate: 8%, 14% | Super reduced rate: 3%

Malta - Standard rate: 18% | Reduced rate: 5%, 7%

Netherlands - Standard rate: 21% | Reduced rate: 9%

Norway - Standard rate: 25% | Reduced rate: 15%, 12%

Poland - Standard rate: 23% | Reduced rate: 5%, 8%

Portugal - Standard rate: 23% | Reduced rate: 6%, 13%

Romania - Standard rate: 19% | Reduced rate: 5%, 9%

Slovakia - Standard rate: 20% | Reduced rate: 10%

Slovenia - Standard rate: 22% | Reduced rate: 9.5%, 5%

Spain - Standard rate: 21% | Reduced rate: 10% | Super reduced rate: 4%

Sweden - Standard rate: 25% | Reduced rate: 6%, 12%

Switzerland - Standard rate: 8.1% | Reduced rate: 2.6%, 3.8%

United Kingdom - Standard rate: 20% | Reduced rate: 5%

EU VAT Rate Categories & Applications (2024 Update)

A VAT standard rate applies to most of goods and services within each country. However, specific categories such as foods and books may qualify for reduced rates, determined by the regulations of each country. Certain EU member states also maintain super-reduced rates for certain products and services. Reduced VAT rates primarily aim to enhance social equity, while the government recognizes that lower-income households spend proportionally more on essentials like food and transport. Other purposes include encouraging the consumption of merit goods such as books, supporting local services like tourism, and supporting environmental improvement like clean energy.

Below is a detailed overview of VAT structures in major European markets (France, Germany, Italy, Spain, and the UK).

France VAT Rates

Standard rate (20%):

Applies to all other taxable goods and services

Reduced rate 1 (10%):

• Prepared foods
• Restaurant services
• Agricultural produce
• Residential renovation work
• Cultural venues (museums, zoos, exhibitions)
• Entertainment facilities
• Educational support
• Passenger transport
• Waste management
• Outdoor accommodation

Reduced rate 2 (5.5%):

• Non-prepared food
• Utilities (gas, electricity, renewable)
• Hygiene products
• Disability equipment
• Social housing
• Books
• School meals
• Select entertainment
• Art imports
• Energy-efficient housing
• Specific property purchases

Super reduced rate (2.1%):

• Reimbursable pharmaceutical products
• Blood products
• Livestock for meat production
• Newspapers
• Periodicals

Germany VAT Rates:

Standard rate (19%):

Applies to all other taxable goods and services

Reduced rate (7%):

Essential goods and services including:

• Basic food items

• Healthcare products

• Public transportation

(Full details available in Section 12 of the German VAT Act)

UK VAT Rates:

Standard rate (20%):

Applies to all other taxable goods and services

Reduced rate (5%):

Applies to specific items including:

• Domestic power (gas and electricity)

• Children's car seats

• Some energy-saving home improvements

(Further details available in UK government's VAT guidance)

Spain VAT Rates:

Standard rate (21%):

Applies to all other taxable goods and services

Reduced rate (10%):

• Cultural activities
• Water used for irrigation or food for humans or animals
• Hospitality services
• Products used in food production for humans or animals
• Utilities (electricity, natural gas and organic fuel)
• Transport
• Pharmaceuticals
• Vision correction items
• Property refurbishment work
• Livestock or agricultural sector products
• Road cleaning services
• Garden or public park services

(Details available from Agencia Tributaria - the Spanish tax authority)

Super reduced rate (4%):

• Essential healthcare items
• Feminine hygiene products
• Subsidized housing
• Accessibility services
• Qualifying publications (books, newspapers, magazines excluding advertising-dominant content)

Italy VAT Rates:

Standard rate (22%):

Applies to all other taxable goods and services

Reduced rate 1 (10%):

• Restaurant and catering services including takeaway
• Medicines
• Baby products
• Feminine hygiene products

Reduced rate 2 (5%):

Health and education by welfare associations

Super reduced rate (4%):

Basic foodstuffs:

• Pasta

• Bread

• Daily bakery products

Medical equipment

Books and journals

Zero Rates & Exemptions

General goods and services are subject to the standard or reduced VAT rates, but certain supplies qualify for zero VAT rate or exempt. Although both result in no VAT charged to customers, zero-rated and exempt supplies work differently. With zero-rating, businesses can reclaim input VAT on their purchases, while exempt businesses cannot recover input VAT. Common zero-rated items include essential food, books, and exports, while exemptions normally cover financial services, healthcare, and education.

How to Determine Correct VAT Rates

Applying the correct VAT rate is essential for EU & UK e-commerce compliance. Here's what every business in Europe needs to check:

• Step 1: Identify your sales destination country - VAT rates differ significantly across countries in Europe.

• Step 2: Identify your product or service category - rates differ by type within the European regulations

• Step 3: Verify any special rules that may apply within EU VAT regulations

A common misconception is that VAT rates for similar products are the same across the EU. This can lead to serious compliance issues and fines under EU tax rules. Given the complexity of European VAT regulations, professional guidance is essential for ensuring that you apply the correct rate and ongoing compliance across all European countries.

Understanding correct VAT rates is just the first step. For a complete overview of VAT compliance requirements and the EU official One-Stop-Shop service, read our comprehensive guide here. Contact our VAT experts for a free consultation on your specific VAT requirements.

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