The European Commission reported on EU member states’ deviations from standard VAT rates, noting that Luxembourg, Ireland, and Italy are responsible for 75 percent of the current 64 exceptions across the union. EU VAT rules mandate a standard rate of at least 15 percent and permit reduced rates of a minimum of 5 percent for up to 24 specific categories of goods and services. A 2022 reform further introduced the possibility of super reduced rates (below 5 percent) or zero rates for a maximum of seven categories of essential items, such as food and pharmaceuticals. Additionally, member states can use parking rates of a minimum of 12 percent for goods outside the standard categories, with a transitional focus on phasing out environmentally damaging preferences.
Source: kpmg.com
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