VAT rates in Europe in 2023: full review by country

Here’s a complete overview of VAT rates in Europe in 2023. You’ll find a table detailing, country by country within the European Union, the different rates in force according to the nature of sales of products or services. You’ll also find out about changes in VAT rates and the general rules applicable to rate-setting in Europe.

VAT rates in Europe in 2023: detailed table by member country

Here are the VAT rates to be applied in Europe in 2023:

2023 VAT rates in the European Union: summary of changes

Here are the main changes to VAT rates in Europe in 2023. They are limited to a few transactions in a few European countries.

Changes to VAT rates in France in 2023

From now on, supplies of animal feed used to produce foodstuffs, and supplies of raw materials used in their manufacture, are subject to VAT at 5.5%. Previously, the rate was 10%. The change of rate in France applies to products from poultry farming, fish farming, fishing and agriculture when used in agricultural production. The temporary 5.5% rate for materials and products used to protect against COVID-19 is extended to 2023.

Changes in VAT rates applicable in other European member states

As every year, several other member states in the intra-Community zone have made changes to their VAT rates. Here are the main changes for 2023:

• Luxembourg is lowering all its VAT rates by one point in 2023 (standard rate, intermediate rate and reduced rate). Only the super-reduced rate will remain unchanged at 3% until 2022.
• In Spain, the VAT rate on the sale of basic foodstuffs has been reduced from 4% to 0%. For food products such as oil and pasta, the value-added tax is reduced by 5 points to 5%.

General operation of VAT rates in EU member states

Although each EU member state has its own VAT rates, there are rules that apply throughout the EU. Here are the principles you need to know.

European VAT Directive: general rules on rates

VAT is a consumption tax applicable to the majority of goods and services sold or purchased in the European free-trade area. The European Union established Council Directive 2006/112/EC of November 28, 2006 on the common system of value added tax. EU Directive 2022/542 amends the 2006 directive. It changes the VAT rate rules in order to increase the freedom given to member states.

Minimum standard VAT rates in Europe

The new intra-Community regulations for 2022 do not change the rules for the standard rate. All countries must set this rate at a minimum of 15%. This rate corresponds to the rate generally applicable to the supply of goods and services, with the exception of reduced or special rates. On the other hand, the European Union does not set a maximum for this standard VAT rate.

The concept of a minimum reduced VAT rate in Europe

Annex III of the VAT Directive lists all the goods and services that may be subject to reduced VAT rates. Here are the limits applicable to these reduced rates:

• possibility of applying one or two reduced rates for each EU country;
• the lower limit of the reduced VAT rate is set at 5%, with the exception of a few cases where super-reduced rates are allowed for certain categories of goods, and the existence of a zero rate;
• exclusion of services offered electronically from the reduced VAT rate.

Possible derogations from European VAT rules for certain transactions

The basic provisions on value-added tax rates allow for exceptions. Derogations are sometimes granted historically when a country joins the EU. They are transitional. The parking VAT rate thus corresponds to a reduced VAT rate with a minimum of 12%. It applies to products not listed in Annex III of the VAT Directive. The aim for these countries is to eventually reach the standard rate.

VAT rates in Europe: the Europa portal

For more information on VAT rates in Europe in 2023 and every year, companies can consult the Europa portal. This is an official website of the European Union. It publishes details of the VAT rates in force for each EU member country, according to the category of services or sales of goods. The portal also provides companies with a rate history. Trade in goods and services within the European Community is subject to rules that can be complex for companies. Which VAT rate should be applied? How do I file my VAT return? Which country should be used for which transaction, particularly for intra-Community services?

Fiscalead specializes in operational assistance for indirect taxes. We are experts in the management of VAT, excise duties and customs in Europe. If you’re in any doubt about recovering European VAT, or if you’re involved in a European trade project, our experts can help you.

If you are a customs representative or a non-EU company, contact us for more information!