The EU publishes a new VAT rate database

The EU Commission published a database with information on standard, reduced, and zero VAT rates on all goods and services in EU Member States. This tool will become useful for online sellers once the OSS regime enters into force, as these sellers will need to double check the correct VAT rate of their products in the country of destination, even if they are not VAT registered in that country due to the OSS simplification.

The database is also a significant improvement for all other traders operating internationally in the EU, as it will serve as a one-stop reference for VAT rates in each Member State.

Until this database was published, the main publication issued by the European Union on VAT rates was an overview of all applicable VAT rates and some reduced rates grouped by category. This overview did not allow searches by CN code or description of certain goods or services.

What are the rules on VAT rates in the European Union?

The EU imposes certain restrictions to Member States in the area of VAT rates. All countries must have a standard rate of at least 15%. Today, Germany has a standard VAT rate of 19% and Luxembourg is also close to this limit with a VAT rate of 17%, most other countries have higher standard VAT rates. The average standard VAT rate in the EU is  21.30%. Some countries like Ireland or Germany recently reduced their standard rates due to COVID-19 consequences.

When are reduced VAT rates used?

Member States are allowed to use one or two reduced VAT rates that cannot be lower than 5% and can only be used on certain supplies of goods and services. The list of allowed items is included in Annex III of the VAT Directive. This limitation reduces the freedom of Member States to decide which goods and services can benefit from a lower taxation. Due to the debates around this lack of freedom, the EU proposed in 2018 reducing the list of Annex III to a very limited number of items, hence providing increased flexibility for Member States to decide on reduced rated items.

In addition to reduced VAT rates, some special VAT rates apply in the EU. These are:

• Super-reduced VAT rates: These are rates below 5% that are exceptionally allowed in certain Member States in a limited list of goods and services.
• Parking rates: These apply on certain goods and services that are not included in Annex III. The condition for parking rates to apply is that they should not be lower than 12%.
• Zero rates: Certain sales benefit from zero rates, so the customer does not pay any VAT. When a zero rated sale is made, you are still allow to deduct VAT on the purchase linked to this sale.

More information about VAT rates in the EU

Our VAT rate overview and our country manuals include comprehensive information about VAT rates applicable in each country. This information is grouped by country and categories.

You can access our VAT rate database via this link.