What is value added tax (VAT) in European countries?

Value Added Tax (VAT) in Europe is a consumption tax applied to almost all goods and services bought and sold for use in the EU. Standard VAT rules are set at EU level, but they may be applied differently in each EU country. VAT is payable on all goods and services at all stages of the supply chain, including sale to the final consumer, which covers the entire production process from start to finish. VAT is not applied to the export of goods to non-EU countries, but when importing goods, VAT must be paid in the country of import.

It is also important to mention that certain goods and services may be subject to preferential VAT rates. This includes various areas such as transportation of passengers and their luggage, supply of books, admission to cultural events, healthcare services, social policy proposals, agricultural goods and services, accommodation services, and many others.

In 2024, VAT rates differ between EU countries. For example, standard rates range from 15% in Luxembourg to 27% in Hungary, while preferential rates also vary widely depending on the country and the product or service involved. It is important to note that some countries, such as Denmark, do not apply any preferential rates, while others, such as Luxembourg, have several different preferential rates, starting at 3%.

VAT rates may also be specific to certain territories of EU countries that either do not apply VAT or have special rates, such as the Canary Islands, the Åland Islands or Guadeloupe. Some territories, such as Monaco, although not part of the EU, are treated as French territory for transactions.

In summary, the rates and scope of VAT in Europe are varied and depend on the nature of the particular transaction and the goods and services to which it relates. It is also important to consider the specific rules and exemptions that apply in the relevant EU country or territory.

Here are the 2024 value added tax (VAT) rates by country in the European Union according to information from ​:

1. Ireland (IE): standard – 23%, preferential – 13,5%, 9%, 4,8%
2. Austria (AT): standard – 20%, preferential – 12%, 10%
3. Belgium (BE): standard – 21%, preferential – 12%, 6%
4. Bulgaria (BG): standard – 20%, preferential – 9%
5. Czech Republic (CZ): standard – 20%, preferential – 14%
6. Denmark (DK): standard - 25%
7. Estonia (EE): standard – 20%, preferential – 9%
8. Greece (EL): standard – 23%, preferential – 13%, 6,5%
9. Spain (EU): standard – 21%, preferential – 10%
10. Italy (IT): standard – 22%, preferential – 10%, 4%
11. Cyprus (CY): standard – 15%, preferential – 8%, 5%
12. Croatia (HR): standard – 25%, preferential – 13%, 5%
13. Latvija (LV): standard – 21%, preferential – 12%
14. Poland (PL): standard – 23%, preferential – 8%, 5%
15. Lithuania (LT): standard – 21%, preferential – 9%, 5%
16. Luxembourg (LU): standard – 15%, preferential – 12%, 6%, 3%
17. Malt (MT): standard – 18%, preferential – 5%, 7%
18. Netherlands (NL): standard – 19%, preferential – 6%
19. Portugal (PT): standard – 23%, preferential – 6%, 13%
20. France (FR): standard – 20%, preferential – 10%, 5,5%, 2,1%
21. Romania (RO): standard – 24%, preferential – 9%, 5%
22. Slovakia (SK): standard – 20%, preferential – 10%
23. Slovenia (SI): standard – 20%, preferential – 8.5%
24. Finland (FI): standard – 23%, preferential – 13%, 9%
25. Sweden (SE): standard – 25%, preferential – 12%, 6%
26. Hungary (HU): standard – 27%, preferential – 18%, 5%
27. Germany (DE): standard – 19%, preferential – 7%

Other countries:

United Kingdom (UK): The standard VAT rate is 20%, which applies to most goods and services. There is a reduced rate of 5% on certain goods and services, such as sanitary products, energy-saving solutions and child car seats. In addition, there is a zero VAT rate (0%) on certain goods and services, including most food, books, newspapers and children's clothing.

Switzerland (CH): The standard VAT rate is increased to 8,1% from 2024. January 1, and the reduced VAT rate for certain goods and services is 2,6% or 3,8%, depending on the type of goods or services. This is a small increase compared to the previous rates.

in Norway the standard VAT rate is 25%. Reduced tariffs also apply: 15% for food products and 12% for passenger transport, cinema tickets and accommodation. More information is available on the website of the Norwegian Tax Administration.

in Ukraine four VAT rates apply: 20%, 14%, 7% and 0%. The standard rate of 20% applies to all transactions subject to VAT, except for those subject to rates of 14%, 7% and 0%. A 14% tariff applies to certain agricultural products, a 7% tariff applies to some medical goods and services, and a 0% tariff applies to exports and certain international services.