🧠 Calquify Intelligence
VAT is the EU's most important revenue source — and rates have been rising since 2008
VAT accounts for approximately 7% of EU GDP and is the single largest tax revenue source for most member states. Standard rates across the EU have risen steadily since the 2008 financial crisis — the EU average was approximately 19,5% in 2008, rising to approximately 21,5% by 2026. Hungary raised its rate to 27% in 2012 (still the highest). Countries including France, Netherlands, and Finland raised standard rates during the 2010s. The EU minimum standard rate (15%) has not changed since 1993.
Source: European Commission VAT Gap Report 2025
Digital services VAT harmonisation: B2C digital services are taxed where the consumer is — not where the supplier is
Since 2015 (EU) and 2021 (UK), B2C digital services (streaming, software, e-books, apps) are VAT-taxed in the customer's country at the customer's country's rate. A UK consumer buying from a Dutch provider pays UK 20% VAT. This harmonisation eliminated the Luxembourg tax shopping (Amazon, Spotify, etc.) that applied pre-2015 and ensures small EU businesses compete fairly with large platforms. The EU One Stop Shop (OSS) allows suppliers to register in one member state and report all EU B2C VAT centrally.
Source: EU VAT Directive 2021/522 — OSS reform
Food VAT varies enormously across Europe — from 0% (UK, Ireland) to 25% (Denmark) with no reduced rate
UK and Ireland apply 0% VAT to most basic food items — one of the most consumer-friendly food VAT structures in Europe. Most EU member states apply a reduced rate of 5-10% to food. Hungary applies 5% to some basic foods despite its 27% standard rate. Denmark applies its full 25% rate to food — no reduced rate at all — making Denmark one of Europe's most expensive food VAT environments. This creates significant cross-border shopping in the Danish-German border region.
Source: European Commission VAT rates table 2026
Standard VAT Rates — Europe 2026 (%)
European Commission + national authorities
VAT on Food — Key European Markets 2026
European Commission VAT table
📋 Reference Data
Standard VAT Rates — Europe 2026
European Commission + national tax authorities
| Country | Standard Rate | Reduced Rate(s) | Super-Reduced | Zero Rate | VAT on Food |
|---|---|---|---|---|---|
| Hungary 🇭🇺 | 27% | 5% / 18% | — | — | 5% (basic) / 27% |
| Denmark 🇩🇰 | 25% | — | — | — | 25% (no reduced) |
| Sweden 🇸🇪 | 25% | 12% / 6% | — | — | 12% |
| Norway 🇳🇴 | 25% | 15% / 12% | — | — | 15% |
| Finland 🇫🇮 | 25,5% | 14% / 10% | — | — | 14% |
| Croatia 🇭🇷 | 25% | 13% / 5% | — | — | 5% / 13% |
| Romania 🇷🇴 | 19% | 9% / 5% | — | — | 9% |
| Poland 🇵🇱 | 23% | 8% / 5% | — | — | 5% / 8% |
| Italy 🇮🇹 | 22% | 10% / 5% | 4% | — | 4% / 10% |
| Austria 🇦🇹 | 20% | 13% / 10% | — | — | 10% |
| Belgium 🇧🇪 | 21% | 12% / 6% | — | — | 6% |
| Netherlands 🇳🇱 | 21% | 9% | — | — | 9% |
| Ireland 🇮🇪 | 23% | 13,5% / 9% | 4,8% | 0% | 0% (basic food) |
| Spain 🇪🇸 | 21% | 10% | 4% | — | 4% / 10% |
| Portugal 🇵🇹 | 23% | 13% / 6% | — | — | 6% / 13% |
| France 🇫🇷 | 20% | 10% / 5,5% | 2,1% | — | 5,5% / 10% |
| Germany 🇩🇪 | 19% | 7% | — | — | 7% |
| Czech Rep 🇨🇿 | 21% | 15% / 10% | — | — | 10% (basic) |
| Switzerland 🇨🇭 | 8,1% | 2,6% / 3,8% | — | — | 2,6% |
| Luxembourg 🇱🇺 | 17% | 14% / 8% / 3% | — | — | 3% |
| UK 🇬🇧 | 20% | 5% | — | 0% | 0% (most food) |
| Malta 🇲🇹 | 18% | 7% / 5% | — | — | 0% |
ⓘ Reduced rates apply to specific product categories defined by each member state within EU VAT Directive rules. EU member states must have a standard rate of at least 15%. Super-reduced rates (below 5%) are grandfathered from before the Directive. Switzerland is not EU — its VAT (MWST/TVA) system is independent.
VAT Rates by Product Category — Key European Markets 2026
European Commission VAT rates table + national authorities
| Category | UK | Germany | France | Netherlands | Spain | Italy | Ireland |
|---|---|---|---|---|---|---|---|
| Food (basic) | 0% | 7% | 5,5% | 9% | 4% | 4% | 0% |
| Restaurants | 20% | 7% | 10% | 9% | 10% | 10% | 13,5% |
| Hotels | 20% | 7% | 10% | 9% | 10% | 10% | 9% |
| Books (print) | 0% | 7% | 5,5% | 9% | 4% | 4% | 0% |
| E-books | 0% | 7% | 5,5% | 9% | 4% | 4% | 0% |
| Electricity (household) | 5% | 19% | 5,5% | 9% | 10% | 10% | 13,5% |
| Pharma / Medicines | 0% | 7% | 2,1% | 9% | 4% | 10% | 0% |
| Children's clothing | 0% | 19% | 20% | 21% | 21% | 22% | 0% |
| Bicycles | 20% | 19% | 20% | 21% | 21% | 22% | 23% |
| Digital services (B2C) | 20% | 19% | 20% | 21% | 21% | 22% | 23% |
ⓘ UK and Ireland apply 0% to most basic food, children's clothing, books, and medicines — the most consumer-friendly in Europe. Germany's 7% reduced rate covers a wide range of goods. France's 2,1% super-reduced rate on medicines and press is one of Europe's lowest. Digital services (streaming, software) are taxed at the customer's country's standard rate in all EU/UK markets.
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German 19% / 7% — extensive reduced rate coverage
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Corporate tax alongside VAT — business planning rates
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Income tax complements VAT for total tax burden picture
🔬 Methodology & Sources
VAT Data Compilation
VAT rates compiled from the European Commission's VAT information database, IBFD VAT Guide 2026, and national tax authority publications. EU standard rates must be at least 15% (Directive 2006/112/EC). Reduced rates are permitted for goods/services listed in Annex III of the Directive. Some member states retain grandfathered super-reduced rates (below 5%) and zero rates from before the Directive. Non-EU countries (UK, Norway, Switzerland) operate independent VAT systems.
Formula
VAT = Net_price × applicable_rate | Gross = Net × (1 + rate) | Net = Gross / (1 + rate)
CitationEU VAT Directive 2006/112/EC as amended; European Commission VAT Rates Database 2026; IBFD European Tax Handbook 2026.
❓ Frequently Asked Questions
Hungary has Europe's highest standard VAT rate at 27% — the highest of any EU member state and among the highest in the world. Denmark and Sweden are second at 25%, along with Norway, Croatia, and Finland (25,5%). Switzerland has Europe's lowest VAT at 8,1% (raised from 7,7% in January 2024 to fund pension reform). Luxembourg's 17% is the EU's lowest standard rate.
UK applies 0% VAT to most food purchased in shops for home consumption. However, food served hot (cooked in a restaurant, café, or takeaway) is taxed at 20%. Certain items like crisps, chocolate, and alcohol are taxed at 20% even if consumed at home. Children's clothing and shoes, books, and most prescription medicines are also 0%. Ireland has the same 0% structure for basic food. Most other EU countries apply reduced rates of 5-10% to food.
EU member states must apply a standard rate of at least 15% (required by EU VAT Directive Article 97). This minimum has not changed since 1993. Luxembourg at 17% is closest to the minimum. Member states may apply reduced rates (minimum 5%) to certain goods and services listed in Annex III of the Directive, and may retain grandfathered super-reduced rates below 5% for goods/services that had such rates before 1991.
Since 2015 (EU) and 2021 (UK), B2C digital services are taxed at the customer's country's VAT rate — not the supplier's. This means if you're in France buying a Netflix subscription, you pay French 20% VAT regardless of where Netflix is headquartered. Suppliers can use the EU One Stop Shop (OSS) to register for VAT in one member state and report all EU B2C VAT centrally. This eliminated Luxembourg tax shopping (where companies like Amazon and iTunes previously based their EU VAT registration at Luxembourg's low 17% rate).
Switzerland raised its standard VAT rate from 7,7% to 8,1% on 1 January 2024 as part of a reform package to fund the AHV/AVS state pension system. The reduced rate rose from 2,5% to 2,6% and the special hotel rate from 3,7% to 3,8%. Despite the increase, Switzerland remains Europe's lowest VAT jurisdiction — 8,1% versus the EU average of approximately 21,5%. The Swiss VAT system is administered by ESTV (Eidgenössische Steuerverwaltung) and applies from a turnover threshold of CHF 100.000.
Sources & References
Data sourced from official institutional publications. Results are for informational purposes only. Last reviewed Jan 2026.
Data Disclaimer
VAT rates sourced from European Commission VAT information database and national tax authorities. Reduced rates apply to specific categories — always verify the applicable rate for a specific product or service with local tax authority.
VAT rates sourced from European Commission VAT information database and national tax authorities. Reduced rates apply to specific categories — always verify the applicable rate for a specific product or service with local tax authority.