Living Abroad

Tax Planning Consultancy for UK Expatriates Living Abroad

EU VAT rates vary considerably from country to country with for example (at the time of writing) the standard VAT rate in Luxembourg being only 15% whereas in Finland the standard rate is an eye watering 28%! However, as with most areas in tax planning it is not as simple as selecting the country with the lowest standard VAT rate as many countries have special, reduced, zero rated or even exempted VAT rates for particular sectors, which may be economically driven as with the hospitality sector rate of only 8% in Cyprus or socially driven as is the case in Ireland where children’s clothing is zero rated. In addition, the thresholds where VAT registration becomes compulsory also vary greatly as do the payment and repayment of VAT with for example the Cypriot fiscal authorities preferring to give a credit against future VAT liabilities rather than pay back VAT at the end of each quarter as is the case in the United Kingdom.

In addition, there are also EU anomalies such as with the Isle of Man, which is in fact not part of the EU save (as is also the case in Monaco) with respect to VAT whilst Gibraltar is part of the EU but does not charge VAT. Of course, VAT rates cannot be looked at in isolation but must be considered in conjunction with corporate tax rates, perhaps individual tax regimes and definitely the veracity for a particular business sector making VAT advice the preserve of chartered accountants and tax planners.

Country Standard VAT Rate (s)
Special Rates = SR
Beneficial Tax Regime for Individuals? Overall Rating 1-10
Austria 20% - SR 10% 5/10
Belgium 21% - SR 12% - 6% 5/10
Bulgaria 19% - SR 9% 7/10
Cyprus 19% - SR 8% - 5% Yes 8/10
Czech Republic 21% - SR 15% 6/10
Denmark 25% 5/10
Estonia 20% - SR 9% 7/10
Finland 28% - SR 14% - 10% 5/10
France 20% - SR 7% - 5.5% - 2.1% 5/10
Germany 19% - SR 7% 6/10
Greece 23% - SR 13% - 6.5% 5/10
Hungary 27% - SR 18% - 5% 7/10
Ireland 23% - SR 13.5% - 9% - 4.8% - 0% Yes 10/10
Italy 20% - SR 5% 5/10
Latvia 21% - SR 12% 8/10
Lithuania 21% - SR 9% - 5% 8/10
Luxembourg 15% - SR 6% - 3% 7/10
Malta 18% - SR 7% - 5% - 0% Yes 8/10
Netherlands 21% - SR 6% 6/10
Poland 23% - SR 8% - 5% 6/10
Portugal 23% - SR 13% - 6% 5/10
Romania 21%- SR 9% - 5% 6/10
Slovakia 19% - SR 10% 7/10
Slovenia 22% - SR 8.5% 8/10
Spain 21% - SR 10% - 4% 5/10
Sweden 25% - SR 8% - 5% 5/10
United Kingdom 20% - SR 5% - 0% Yes 9/10

For further information please contact Steven Shen BA (Hons), MBA at This email address is being protected from spambots. You need JavaScript enabled to view it.