2014-07 Extreme standard VAT rates in Europe

EuCham decided to list the countries with extremely low and high standard VAT rates. European countries were ranked from the lowest to the highest using the standard VAT rate. The ranking shows that VAT rates in Andorra, Switzerland and Liechtenstein are remarkably lower than in other European states. Hungary, where the rate increased to 27% in 2012, is ranked last.

Download PDF

Detailed information

EuCham decided to list the countries with extremely low and high standard VAT rates. European countries were ranked from the lowest to the highest using the standard VAT rate.The ranking shows that VAT rates in Andorra, Switzerland and Liechtenstein are remarkably lower than in other European states. Hungary, where the rate increased to 27% in 2012, is ranked last.

However, the VAT system of a state cannot be described only by its standard rate. The application of reduced and zero VAT rates vary significantly in Europe, thus differentiating their VAT systems, even if their standard rates only deviate by a couple percentage points. A good example for this is the case of the United Kingdom, which has a standard rate of 20% while using zero rate extensively. There is an intention from the European Commission to harmonize the VAT system of EU member states, while the VAT system is still an important factor in the competition between the countries.

Table 1: Extreme standard VAT rates in Europe

Sources: Ernst & Young 2014 – Worldwide VAT, GST and Sales Tax Guide; Deloitte 2014; KPMG 2014; European Commission 2014.
EuCham Research Department – Complied by Valéria Varga 2014-06-25. Reviewed by Kenneth Vekima 2014-07-16