VAT Across Europe — Rates, Rules & Cross-Border Sales

Standard VAT rates by country (2025)

Every EU member state sets its own VAT rates within the framework of the VAT Directive. Standard rates as of January 2025:

• Hungary: 27%
• Denmark, Sweden, Croatia: 25%
• Finland, Greece, Ireland, Poland, Portugal: 23–24%
• Belgium, Czech Republic, Latvia, Lithuania, Spain, Netherlands, Austria: 21%
• Bulgaria, Estonia, France, Slovakia, Slovenia: 20%
• Germany, Romania, Cyprus: 19%
• Malta: 18%
• Luxembourg: 17%

The UK, post-Brexit, maintains its 20% standard rate independently.

Reduced and super-reduced rates

Most countries apply reduced rates (typically 5–12%) to essential goods: food, books, public transport, medical supplies, children's clothing. Some have super-reduced rates (below 5%) for items like bread or newspapers.

The items qualifying for reduced rates differ by country. For example, France applies 5.5% to food and books but 20% to electronics, while Ireland zero-rates most food but charges 23% on restaurant meals.

The One Stop Shop (OSS) scheme

Since July 2021, the EU One Stop Shop simplifies VAT on cross-border B2C sales of goods and services. Instead of registering in every country where you sell, you register in one member state and file a single quarterly return covering all EU sales.

The threshold for mandatory use is €10,000 in cross-border B2C sales per year. Below this, you can charge your home country's rate. Above it, you must charge the destination country's rate — which is where OSS registration helps.

UK VAT after Brexit

Since 1 January 2021, UK VAT operates independently of EU rules. Key differences:

• No OSS — UK businesses selling to EU consumers must register in the EU (or use the Import One Stop Shop for goods ≤€150)
• UK applies its own reduced rate (5%) and zero rate (0%) independently
• Northern Ireland follows EU VAT rules for goods under the Windsor Framework
• Digital services to EU consumers are subject to EU VAT (register via OSS in an EU state)

Cross-border B2B: the reverse charge

When selling services to a VAT-registered business in another EU country (or the UK), the reverse charge mechanism applies. You invoice without VAT (net amount only) and the buyer accounts for VAT in their own return. Your invoice must include both VAT numbers and a note stating "Reverse charge applies, Art. 196 VAT Directive".

This avoids the seller needing to register in the buyer's country. The same principle applies to UK-EU trade for services.

Using the VAT calculator for cross-border pricing

Select the destination country in the VAT calculator to apply the correct rate. For B2C e-commerce, always use the consumer's country rate once you exceed the €10,000 threshold. For B2B with valid VAT number, invoice at 0% with reverse charge notation.

The invoice calculator can apply withholding tax for countries that require it (Turkey, Italy) alongside VAT — useful for freelancers billing across borders.