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EU VAT Rates Stabilizing, Ending Upward Trend

by Ulrika Lomas, Tax-News.com, Brussels

16 November 2016


Just one EU member state has increased its headline VAT rate since 2014, indicating that states are no longer looking to VAT to fund other growth-friendly reforms, as had been seen in previous years.

The EU said in its new Taxation Trends report that the rising trend up to 2014 in standard VAT rates has now stopped. Since then, only two member states have adjusted their standard VAT rates: Luxembourg raised its rate by two percentage points in 2015 and Romania reduced its standard VAT rate in 2016 by four percentage points. This resulted in a decline in the average standard rate in the EU, to just below 21.5 percent.

The highest VAT standard rate is in Hungary (27 percent), followed by Croatia, Denmark, and Sweden (all 25 percent). The lowest rates are in Luxembourg (17 percent) and Malta (18 percent). Among EU states, Sweden relies most heavily on VAT in terms of its taxes on consumption, with VAT revenues accounting for 75 percent of indirect tax revenues. Italy received just 53 percent of indirect tax revenues from VAT.

The report includes a list of VAT measures implemented by each member state last year.

TAGS: VAT rates | tax | value added tax (VAT) | Denmark | Hungary | Malta | accounting | Luxembourg | Romania | Italy | Sweden | Croatia | Tax

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