On 6 April 2022, an adjustment to the European Union (EU) Value-Added Tax (VAT) Directive was published in the Official Journal.
Amended EU rules on VAT rates
- Under the amended rules, EU Member States will be able to apply up to five VAT rates depending on the product or service:
- One standard rate
- Two reduced rates of no less than 5%, whereby these rates may be applied to a maximum of 24 points from (the amended) Annex III of the Directive; “points” are categories of goods and/or services in that Annex, e.g., children’s clothing and footwear; supply of children’s car seats or hairdressing
- A reduced rate of less than 5%, only applicable to a maximum of seven specifically designated points from (the amended) Annex III, may be applied
- An exemption with the right to deduct, only applicable to a maximum of seven specifically designated points from (the amended) Annex III may be applied
- For the last two rates, the maximum of seven points applies to the two rates jointly
- Added to Annex III, among others, are: (i) rental of immovable property for residential use; (ii) access to the live streaming of events (if physical access can also fall under the reduced rate and, as mentioned, only from 2025); (iii) the supply and installation of solar panels; (iv) the supply of electricity and heat; (v) the supply of children’s clothing; and (vi) the supply of (electric and non-electric) bicycles
- ….
Source EY
Latest Posts in "European Union"
- ECJ Opinion Sheds Light on VAT for Ancillary Services in German Accommodation Sector
- Briefing document & Podcast – C-409/04 (Teleos): Physical Movement & Supplier Due Diligence Key for Intra-EU VAT Exemption
- EU boosts tax cooperation with Andorra, Liechtenstein, Monaco, and San Marino
- Briefing document & Podcast: ECJ C-271/06 (Netto Supermarkt) – VAT exemption granted if fraud undetectable with due commercial care
- Switch to New EU Portal for Customs Applications and CBAM Access Starting 2026
