EU: Minimum standard VAT rate set at 15%

The EU’s Economic and Financial Council (ECOFIN) has adopted a directive, permanently fixing the minimum standard VAT rate throughout the EU at 15%.

The minimum rate has been maintained at 15% since VAT rules for the EU single market were applied in 1993. It was the last extended in May 2016 for 2 years.

The rate is aimed at preventing excessive divergence in VAT rates in the EU Member States. This reduces the risk of distortions of competition through lower VAT rates in some Member States that might impact cross-border shopping and trade.

Recently, the EU drafted new law amendments, impacting VAT legislation.

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