VAT rate changes 2020.

The complex world of International VAT is subject to continually changing legislation, diverse filing requirements and large financial penalties for non-compliance. When the stakes are this high, you need to ensure your company is up to date with the latest VAT rate changes.

Many VAT rates changes have been implemented in January 2020, Taxback International take a look at some of these changes that may affect you.

Canary Islands

As of 1 January 2020, the Canary Islands increased the standard VAT rate from 6.5% to 7%. Additionally, the luxury goods VAT rate will increase from 13.5% to 15%.

Croatia

As of 1 January 2020, there was a reduction in the VAT rate in the hospitality industry for food and preparation and serving (excluding alcohol) outside a catering facility, from 25% to 13%.

Czech Republic

From 1 May 2020, the VAT rate for the below will be reduced from 15%/21% to 10%:

• Catering services including serving draught beer
• Audiobooks and e-books
• Sewer and water charges
• Barber services and hairdressing services
• Bicycle repairs
• Footwear
• Repairs and adjustments of clothing
• Textile products

Germany

The VAT on feminine products will reduce from 19% to 7% from 1 January 2020.

Hungary

As of 1 January 2020, there is a reduction in accommodation services from 18% to 5% (tourism development contribution of 4% will be extended to these services).

Ireland

As of 1 January 2020, a VAT rate of 13.5% for food supplements was introduced. Certain products will be excluded, such as some vitamins, minerals and fortified foods.

Italy

As of 1 January 2020, the VAT rate for compostable or washable products for the protection of feminine hygiene has been reduced from 22% to 5%.

Poland

From 1 April 2020, the VAT rate on the below goods will reduce from 8% to 5%:

• Bread and cakes
• Fruit
• Soups and broths
• Homogenised and dietetic foods
• Food for infants and toddlers
• Pacifiers, nappies and car seats
• Hygiene products
• Diapers and insoles for babies

From 1 April 2020, the VAT rate for sweet pepper, mustard, specific processed spices and some unprocessed spices (cumin and turmeric) will increase from 5% to 8%.

The VAT rate of below products will increase from 5%/8% to 23% as of 1 January 2020:

• Lobsters and octopus
• Molluscs and aquatic invertebrates (including crabs, crawfish, shrimps)
• Preparations made of these, as well as caviar and dishes sold in catering establishments

Slovenia

As of 1 January 2020, the VAT rate for e-books and electronic journals has been reduced from 22% to 5%.