Why understanding VAT rates in Europe matters for your business
For businesses trading across borders, particularly between the UK and the EU, a clear understanding of European VAT rates is no longer optional — it is a critical compliance and strategic issue.
Applying an incorrect VAT rate can quickly lead to non-compliance, triggering assessments, penalties and interest from tax authorities. In a post-Brexit environment, where EU–UK trade is subject to increased scrutiny and divergent rules, VAT errors can also disrupt supply chains and delay goods at the border.
At 4 Eyes Ltd, we regularly see that VAT rate accuracy is not just a technical detail, but a key component of risk management. Correctly identifying the applicable VAT rate in each jurisdiction is essential to ensuring compliant invoicing, accurate VAT reporting and robust audit trails across multiple countries.
VAT rates as a strategic decision-making tool
Beyond compliance, VAT rates directly affect pricing, margins and cash flow. Businesses operating in several EU Member States — or supplying goods and services from the UK into the EU — must factor local VAT rates into their commercial and financial strategies.
A clear understanding of VAT rates enables businesses to:
anticipate the tax impact on cross-border transactions,
model costs and margins more accurately,
make informed decisions when entering new EU markets, and
structure supply chains in a VAT-efficient manner.
This strategic perspective is central to 4 Eyes Ltd’s approach, combining technical VAT expertise with commercial insight to support sustainable cross-border growth.
EU VAT rates by Member State (2026)
The table below provides a practical reference overview of VAT rates across EU Member States, supporting businesses engaged in intra-EU trade and EU–UK transactions.
EU VAT rates by Member State (2026)
Member State Country Code Standard VAT Rate Reduced VAT Rates Super-Reduced VAT Rate
Germany DE 19% 7% –
Austria AT 20% 10%, 13% –
Belgium BE 21% 6%, 12% –
Bulgaria BG 20% 9% –
Cyprus CY 19% 5%, 9% –
Croatia HR 25% 5%, 13% –
Denmark DK 25% – –
Spain ES 21% 10% 4%
Estonia* EE 24% 9% –
Finland* FI 25.5%* 14%, 13.5%* –
France FR 20% 5.5%, 10% 2.1%
Greece EL 24% 6%, 13% –
Hungary HU 27% 5%, 18% –
Ireland IE 23% 9%, 13.5% 4.8%
Italy IT 22% 5%, 10% 4%
Latvia LV 21% 5%, 12% 5%
Lithuania* LT 21% 9%, 12%* –
Luxembourg LU 16% 7%, 13% 3%
Malta MT 18% 5%, 7% –
Netherlands NL 21% 9% –
Poland PL 23% 5%, 8% –
Portugal PT 23% 6%, 13% –
Czech Republic CZ 21% 10%, 15% –
Romania RO 21% 11% –
Slovakia* SK 23%* 19%*, 5% –
Slovenia SI 22% 5%, 9.5% –
Sweden SE 25% 6%, 12% –
* One or more VAT rates have changed compared to 2025.
Key VAT insights for cross-border trade
Lowest standard VAT rate in the EU (2026): Luxembourg at 16%, often relevant for holding and distribution structures.
Highest standard VAT rate in the EU (2026): Hungary at 27%, requiring careful pricing and margin planning.
Average EU VAT rate: approximately 21.82%, highlighting the importance of jurisdiction-specific analysis rather than a “one-size-fits-all” approach.
UK and Swiss VAT rates (2026)
United Kingdom
Standard rate: 20%
Reduced rate: 5%
Zero rate: 0%
Switzerland
Standard rate: 8.1%
Reduced rate: 2.6%
Zero rate: 0%
VAT rates may change during the year following national fiscal decisions.
How 4 Eyes Ltd can help
4 Eyes Ltd provides comprehensive UK and EU VAT advisory and compliance services, supporting businesses trading across borders. Working closely with our EU network partners, we assist with:
VAT rate analysis and transaction mapping,
EU VAT registrations and ongoing compliance,
EU–UK trade structuring post-Brexit, and
risk mitigation through proactive VAT planning.
If you would like tailored advice on how VAT rates affect your cross-border operations, our team would be pleased to assist.