2025 Changes in EU VAT Rates

In the recent months a number of countries in Europe have announced their intention to amend some of their current VAT rates.

It is worth noting that some of the changes are linked to the so-called ‘VAT Rate Directive’ (Council Directive (EU) 2022/542 of 5 April 2022) granting Member States more flexibility on shaping their reduced VAT rates systems, the provisions of which are coming into force from the 1st of January 2025 and we invite you to read Essentia’s article about it here.

To help you navigate in this dynamically changing space, we have put together the below overview of what is in plans to change from 1 January 2025:

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? Slovakia – approved & signed by president – increase of standard VAT rate from 20% to 23%; – introduction of a new ‘reduced’ VAT rate of 19% which is to apply to electricity and foodstuff other than that qualifying for the 5% reduced rate; – 5% reduced VAT rate to apply to certain basic foodstuffs, medicines, books, newspapers as well as the defined catering and accommodation.

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? Estonia – Plans to further increase the standard VAT rate from 22% to 24%.

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? Finland – Most items that are currently subject to 10% reduced rate are to become subject to 14% rate; The exception to this will be newspapers, periodicals and public broadcasting, which are to remain at 10%; – Reduction of VAT rate from 25.5% to 14% is planned for children’s diapers, and menstrual pads.

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? France In light of the new ‘VAT Rate Directive’, mentioned earlier, France is planning to get its current reduced VAT rates on heating-related supplies aligned with the 2025 reduced VAT rates EU requirements, e.g. – Supply and installation of fossil fuel boilers will no longer be eligible to a reduced VAT rate; – Amending definition of renewable energy.

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? Italy – supplies of qualifying live equines, not to be used for preparing food products, will be subject to 5% reduced VAT rate; – supplies of certain qualifying winter sports courses can be subject to 5% reduced rate.

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? Latvia – Proposal to apply 12% reduced VAT rate on certain fresh fruits, berries, and vegetables.

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? Romania – 9% reduced rate will apply to food for bees, even if the total sugar content of such food will exceed 10g/100g of a product. Further changes within the reduced EU VAT rates structures are expected to be announced towards the end of this year and early next year; therefore watch this space.

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