While EU member states must work within the VAT Directive, each has its own VAT rates. This guide details VAT rates across all 27 EU member states and explains what the different rates mean for your company.
When the EU was created, the six original countries had multiple forms of indirect taxation, creating a risk of export subsidies. A new system was necessary to ensure tax neutrality.
The unified VAT system was the solution. Value Added Tax is a consumption tax applied to most commercial activities. VAT is charged at each stage of the supply chain, but sellers claim input credits and the final consumer bears the burden of the tax.
The VAT Directive created a harmonized framework across EU member states, setting uniform rules for invoicing, exemptions, and deductions. But while all countries are bound by common rules, they can set their own rates within EU guidelines, which require a minimum 15% rate.
Rates today vary from 17% in Luxembourg to 27% in Hungary, with an average VAT rate of 21.8%. However, there aren't just different rates across the EU, but also different rates in each country. So, the actual VAT due may vary dramatically by customer location and product type.
Every business selling into the EU must understand the EU VAT rates. This guide provides a detailed table of VAT rates for each EU member state, insight into how rates vary by product category, and information on recent changes affecting VAT rates.
Within the EU, there are five distinct VAT rates. They include the following.
The table below shows EU VAT rates by country. Here are the rates you can expect to pay, or to collect and remit, in each location.
*Malta's 12% is an intermediate rate applying to a narrow set of items (pleasure boat hire, securities management, certain healthcare), not a standard reduced rate for common goods.
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VAT rates can change over time, and several countries made notable rate changes in recent years. Sellers who have an obligation to collect VAT in the EU should be aware of the rule modifications to remain in compliance.
Changes to VAT rates are common, as countries use VAT as a policy lever.
Specifically, many countries put temporary VAT reductions in place during periods of high inflation, as Germany did in 2020 and Poland in 2022. Rate increases may also be driven by defense spending or fiscal consolidation, which occurred in Estonia in 2025.
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Although individual EU countries set their own VAT rates, there are common trends regarding which types of goods and services are taxed at the standard rate versus a reduced or zero rate.
It's helpful for sellers to understand these trends, as VAT rates impact pricing and margin.
Here are some details on how most EU countries treat different categories of products under their VAT policies.
Most EU countries apply their own individual standard rates to clothing and footwear, with notable exceptions including Ireland where children's clothing and footwear is zero-rated.
Some countries have a reduced rate for clothing repairs to promote sustainability and combat fast fashion. For example, Sweden's VAT rate on clothing and footwear repairs is 12%.
Many EU countries reduce the VAT charged on food at home and groceries (although not necessarily restaurant food).
The exact rate can vary substantially by country. For example, France charges a reduced rate of 5.5% for most foods, while Italy charges a super reduced rate of 4% for essential staples like bread and pasta but charges 10% for non-staple foods and restaurant services.
In other countries, like Denmark, there is no reduced food rate and the standard rate applies.
In most EU countries, print books are taxed at a reduced rate thanks to relatively recent changes. In 2018, digital books (ebooks) were added to Annex III, allowing digital books to be subject to the same reduced rates as print books.
Like with most goods and services, the rules in the location where the customer is located apply to determine the VAT rate on digital publications -- not the rules where the seller is registered.
In January 2015, the European Union established rules requiring sellers to collect VAT on digital goods, including apps, downloads, streaming services, and SaaS. The tax had to be collected based on the customer's location. This was managed via the Mini One Stop Shop (MOSS).
While some sellers assume digital goods are exempt from VAT or taxed at a reduced rate, this is not typically the case. Most EU countries charge tax on digital goods at the standard rate and your company will need to know the rules in the customer's country.
In many EU countries, medicines are taxed at either a reduced or super reduced rate, such as France's 2.1% rate on certain medications. Medical devices and equipment for disabled individuals may also qualify for a reduced rate.
However, health foods and supplements are usually not considered health or pharmaceutical products.
These products may still be charged at a reduced rate if they are considered foodstuffs, and the Netherlands applies its reduced food VAT rate of 9% to dietary supplements. But, they would not typically qualify for the rate applied to pharmaceutical products and prescription medications.
The VAT rate that applies to your transaction is based on what you're selling, as well as the location of your customer. The location where your business is registered, or where the goods originate, is typically not relevant.
There are different rules for when and how VAT is collected depending on whether you are selling SaaS or digital service products, as well as whether you are selling directly to customers (B2C) or to wholesalers or non-EU businesses.
Here are some of the key details about how EU VAT rates apply to different types of businesses.
If you are an EU-based business, you will charge VAT at your own country's rate if you have under €10,000 in transactions per year. If you exceed this threshold, destination-based rules require you to charge VAT based on where your customer is located.
EU-based businesses may take part in the One Stop Shop (OSS) to avoid having to register in multiple locations. You can register in one member state, file one quarterly OSS return, and pay the total VAT to the local taxing authority where you're registered.
The tax authority then distributes the VAT to the appropriate member states
Non-EU businesses are subject to destination-based rules from the very first sale. They must be registered, collect VAT at the correct rate, and remit it appropriately.
Non-EU companies supplying services may be eligible for the Non-Union OSS scheme to register and remit VAT through a single member state, while non-EU businesses supplying goods may be eligible for Import One Stop Shop (IOSS) if the value is less than €150.
For non-EU businesses, destination-country rules apply from the first sale for digital goods like SaaS. Sellers of software subscriptions, downloadable content or streaming services must always charge VAT at the rate in their customer's country regardless of sales volume.
In most EU countries, there is no reduced rate for most digital goods, with limited exceptions such as for eBooks. You should be prepared to charge tax at the full rate.
Under the reverse charge mechanism, when a supplier sells to a VAT-registered EU business in another EU country, the burden of VAT compliance shifts to the buyer. The supplier does not charge VAT. The buyer accounts for VAT in its own country.
If this applies to your situation, you may not need to know the rates on the VAT rate table above for purposes of charging customers the correct tax rate. However, it is still helpful to understand your customer's tax burden as you set prices.
You must make sure the buyer is VAT registered to use the reverse charge mechanism. You can validate the buyer's VAT number via the EU's VIES system before applying reverse charge.
U.S.-based businesses and other non-EU sellers are not exempt from EU VAT obligations. There is no registration threshold and you must comply with EU VAT requirements when selling to EU customers even if you have no local presence in the EU.
>> Read More: Sales Tax vs. VAT
While the VAT rate tables above show you the correct VAT rate in countries across the EU, understanding the rate you must charge is just a very small part of your compliance obligations. You also must register when required, file tax returns, and remit payments.
Whether you are selling physical goods, digital services, or any other products, you must understand the EU VAT compliance rules across as many as 27 countries where you're doing business. This can create a huge compliance burden and a major liability risk.
Or you could turn to Numeral and let Numeral take care of compliance for you. Numeral handles everything so you can manage VAT in as little as five minutes a month. This includes:
Numeral backs these services with the Numeral Guarantee. If a filing error or delayed filing caused by our mistake causes you to incur penalties or interest, Numeral covers the cost.
Numeral charges a transparent flat rate for services and there’s no long-term commitment required. Book a demo to learn how we can help you comply with your VAT obligations across the EU.
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Still need to know more? Here are the answers to some frequently asked questions about EU VAT rates.
The EU requires a minimum 15% VAT rate, but provides member states the freedom to set their own rates. Rates range from 17% in Luxembourg to 27% in Hungary, with the average standard rate in the EU being 21.8%.
Hungary's VAT rate of 27% is the highest in the EU. Croatia, Denmark, and Sweden also charge high rates at 25%.
Luxembourg's 17% standard VAT rate is the lowest in the EU, followed closely by Malta with an 18% standard VAT rate.
EU VAT rates apply to U.S. sellers. If you are based in the U.S. but you provide goods or services, including digital goods, to EU customers, you are required to register for EU VAT from the first sale. You also must charge VAT in the applicable customer's country.
A reduced VAT rate means the customer is charged less than the standard VAT rate. In the EU, member countries can charge reduced rates but the rates cannot be below 5%. A zero-VAT rate means the customer is charged a 0% VAT.
Zero-rated items are different from exempt items because they still exist within the VAT system so businesses can recover input VAT.
Not all European countries have a reduced VAT rate. Denmark has a single standard 25% VAT rate that applies across virtually all goods and services, with no goods subject to a lower tier of taxes.
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