- European Commission report reveals major disparities in VAT rate derogations across EU Member States with Luxembourg, Ireland, and Italy accounting for 75% of all 64 current exceptions
- Housing and construction sector dominates with nearly 30% of derogations, while culture, tourism, public services, food, hospitality, and financial services collectively represent 40% of exceptions
- Super reduced and parking rates make up over 90% of derogations, with Luxembourg leading in Annex III goods derogations and Ireland being the only country applying zero VAT to children’s clothing and maritime services
- Cross border adoption of derogations remains minimal since 2021 with only Cyprus, Greece, and Malta opting into nine derogations due to mismatched conditions
- Report highlights concerns about VAT policy fragmentation and calls for harmonization to ensure fair competition across the EU single market
Source: taxation-customs.ec.europa.eu
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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