Stay tuned on upcoming VAT rate changes in Europe

Last update: December 5, 2023

Belgium

• VAT reduction on supplies of electricity, natural gas, and heat via heating networks. For Households and from July 1, 2023, the 6% rate will be permanent. For businesses, the 6% VAT rate stopped June 30, 2023 and standard VAT rate is applicable. 

Croatia

• Croatian Tax Authority have extended the application of the 5% reduced VAT rate for Natural Gas and Heating until 31 March 2024.
  • 5% natural gas from 1 April 1 2022 to 31 March 31 2024 (previously 13%);
  • 5% heating from 1 October 2022 to 31 March 2024 (previously 25%).

Cyprus

• As of July 1, 2023, 5% VAT on the Purchase or Construction of a new residence (upon conditions)
• Per July 23, 2023 Cyprus has introduced a new 3% value added tax (VAT) rate and extended the application of 0% VAT for goods used by people with disabilities. The goods that now qualify for 0% VAT include typewriters with Braille characters, special electronic typewriters, new type embossing typewriters, wheeled and other vehicles for the disabled. Goods subject to the 3% VAT rate include books, newspapers, periodicals, special lifting devices, wheelchairs, orthopedic items and appliances, prosthetic items, hearing aids, and other devices for treating disabilities. Services subject to the 3% VAT rate include street cleaning, sewage and refuse collection performed by private entities, waste treatment or recycling, and debut performances of theatrical, musical, dance or classical plays.
• Milk, bread, eggs, and baby food will be taxed at 0% instead of 5%. Detergents, fabric softeners, toilet paper, baby diapers, cleaning supplies, and adult diapers will be taxed at 5% instead of 19%. – This measure bas been extend till April 30, 2024

Czech Republic

• Jan 1, 2024
• Consolidation of Reduced VAT Rates in Approved by Lower Parliament
• Supplies rising to 21% standard rate: these include alcohol, draught beer, and services like hairdressing.
• Supplies moving to the new 12% VAT rate: Supplies subject to 10% and 15% reduced rates will be now subject to a single 12% rate. This includes basic foodstuffs, printed magazines, newspapers, certain medicines, entrance fees to sports and cultural events, and housing.
• Books Exempt from VAT: Finally, books will be exempt from VAT, a significant change from the current 10% rate.

Estonia

• Approved
• Estonia will amend its VAT rates as of Jan 1, 2024, with the standard rate increasing from 20% to 22%. There will also be reduced rates of 9% and 5%.
• Transitional measures include a 20% VAT rate for invoices issued until 31 December 2025 under the cash accounting scheme, and a 20% VAT rate for certain long-term contracts related to immovable property until 31 December 2025.
• From January 2025, there will be a new 13% VAT rate for accommodation services, and press publications will be taxed at 9% instead of the current 5%.

Finland

• No changes per Jan 1, 2024
• Proposed Increase in Reduced VAT Rate to 14% from 2025

France

• Reduced VAT rate of 5.5% for COVID-19 protection materials and products extended until December 31, 2023

Germany

• December 31, 2023: End of reduced rate of 7% on restaurant and catering services, 19% again applicable
• Germany Cabinet Decision: Premature end of reduced VAT on gas from 1.1.2024

Greece 

• The 13% and 6% VAT rate reductions for non-alcoholic drinks, works of art, dance schools, gyms, passenger transport, zoo tickets, personal hygiene and protection products, cinema tickets, theatre and concert tickets have been extended until December 31, 2023.
• In addition, the 24% VAT rate for new properties has been suspended until 2024 to encourage investment.

Hungary

• [Draft] As of 1 January 2024, the tax rate for publications issued at least four times a week (e.g., daily papers) is 0%.

Ireland

• End of of the reduced VAT rate of 9% for hospitality and tourism per August 31, 2023
• End of the reduced VAT rate of 9% for fuel, gas and electricity per October 31, 2023

Italy

• Extension Reduced VAT Rate for Natural Gas Consumption Until December 2023
• VAT rate for infant products returns to 10%: The draft budget law for 2024 in Italy raises the VAT rate from 5% to 10% for certain products. The products affected include feminine hygiene products, infant formula, and certain food preparations for infants. Feminine hygiene products not included in a specific category will be regulated under a new  provision.

Kazakhstan

• [Draft] – VAT hike from 12% to 16-20%

Kyrgyzstan

• Zero VAT rate for vegetable oil imports from May 15, 2023 to December 31, 2024

Latvia

• Reduced 5% rate for fresh fruits, berries and vegetables

Lithuania

• Indefinite extension of the 9% VAT rate on catering services (including non alcoholic drinks and take-away food) per Jan 1, 2024 (Temporary before)

Luxembourg 

• Luxembourg lowered its VAT rates per Jan 1, 2023 for 1 year. Per Jan 1, 2024, this temporary reduction will end and following rates will gain be applicable:
  • Standard rate – 17% from 16%
  • Intermediate rate – 14% from 13%
  • Reduced rate – 8% from 7%

Macedonia

• Per September 1, 2023, 5% preferential rate would no longer apply for the supply of pellets, pellet stoves, and pellet kettles. Products for human consumption that are not subject to the 5% VAT rate would be subject to the 10% rate

Malta

• Malta has introduced a new reduced VAT rate of 12%
• The new rate will co-exist with other reduced VAT rates in the country
• The new rate will apply in niche scenarios such as custody and management of securities, management of credit and credit guarantees, hiring of specific boats, and specific services relating to healthcare
• The new rate will be effective from 1 January 2024

Moldova

• Reduced VAT rate of 6% for hotel and restaurant services until 2 October 2023
• [Proposal] As of January 1, 2024, Hotel accommodation and restaurant services from the 20% standard rate to the reduced rate of 8%

Poland

• Zero VAT on food (meat, fish, dairy products, vegetables, fruit, bakery, and pastry products, as well as certain fruit and vegetable beverages) is to apply until the end of 2023

Portugal

• Portugal Food VAT Rate Cut – extended until 31 December 2023
• Portugal Extends Electricity VAT cut from 13% to 6% (Proposal?)

Romania

• Effective 1 January 2024, there have been changes to the definition of an inhabitable home. The new definition includes requirements such as individual access to living space without disturbing others, access to utilities and waste disposal, designated areas for rest, food preparation, and bathrooms, as well as various installations and finishes.
• Additionally, the VAT rates have been adjusted. The rate for non-alcoholic beer and foods with added sugar (over 10g per 100g) has increased from 9% to 19%. The rate for high-quality food, social housing, renewable energy systems, construction components, and certain recreational activities has increased from 5% to 9%. The rate for specific sports facilities, tourist transportation services, and certain leisure activities has increased from 5% to 19%.

Slovakia

• Proposal: Ministry of Finance proposes 2% VAT increase to 22%

Spain

• 0% VAT on food extended until 30 Jun 2024
• VAT rate applicable to supplies of natural gas will be raised from 5% to 10% until 31 March 2024
• VAT rate applicable to supplies of electricity to qualifying customers, which was temporarily reduced from 21% to 5%, will be raised to 10% for the whole year of 2024

Switzerland & Liechtenstein

• Approved. The standard rate will increase from 7.7% to 8.1%, the reduced rate will increase from 2.5% to 2.6%, and the special rate for accommodation will increase from 3.7% to 3.8% (Guidance about reporting impact of VAT rates increase per January 1, 2024)
• From January 1, 2025, menstrual products so far taxed at the normal VAT will be taxable at the reduced VAT rate 2.6%.

Ukraine

• Reduction of standard VAT rate from 20 to 15%

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