6 Things to Consider When VAT Rate Changes Occur

In recent months, we’ve been helping clients with VAT rate changes within and beyond the EU. The reason for these VAT rate changes ranges from a desire to reduce inflation, action to help support families with the cost of living, helping businesses deal with rising costs and as in the Swiss case, reforming the state pension system.

When there is a VAT rate increase or a VAT rate decrease, this can:

• Be temporary (i.e. last only for a number of months) or a undefined time period
• Apply to all VAT taxpayers and different VAT rates, i.e. standard and reduced rates (as in the case of Luxembourg)
• Directly impact established business entities or be focused on resident people (as in the case of the reduction of the VAT rate of heating, when applicable)
• Relate to specific goods (e.g. energy, sanitary and food products, as in Spain and in Croatia)

Source Sovos

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