VAT is a form of “consumption tax”. It is charged on goods and services and in some countries is known as GST – Goods and Services Tax. The first country to introduce VAT in 1954 was France and it now accounts for around 45% of state revenue. For developing nations such as India – VAT is an important revenue source due to high unemployment and low per capita income.
Here is a summary of VAT rates and currency facts from around the world.
The European Union:
Members of the EU are obliged by European Law to be a part of the European Union Value Added Tax Area. A minimum of 15% VAT must be charged, with the maximum being 25%. Some countries have reduced VAT rates on certain types of goods and services. Unless otherwise stated the currency is the euro.
Austria has a standard VAT rate of 20%, and reduced rates of 12% & 10%. The tax is called USt. (Umsatzsteuer)
Belgium has a standard rate of 21% and reduced rates of 12% & 6%. There are three taxes which can be classified as VAT – BTW, TVA and MWSt.
Bulgaria has a standard VAT rate of 20%, with reduced rates of 0% & 7%. The currency of this country is the Bulgarian lev, which consists of 100 Stotinka to the Lev.
Cyprus has a standard VAT rate of 19% and two reduced rates of 9% and 5%.
Czech Republic has a standard VAT rate of 21% & a reduced rate of 9%. The tax is called DPH and the local currency is the Czech Koruna which 100 Haler to the Koruna.
Denmark has a single VAT rate of 25%. The tax is called moms and the local currency is the Danish krone which consists of 100 Ore to the krone.
Estonia charges a standard VAT rate of 20% & a reduced rate of 9%. The tax is called “km” and the local currency is the Estonian Kroon which consists of 100 sent to the kroon.
Finland has a standard VAT rate of 24% plus 2 reduced rates of 17% and 8%. The taxes are called ALV and Moms.
France has a standard VAT rate of 20% & reduced rates of 5.5% and 2.1%. The tax is called TVA.
Germany has a standard rate of VAT which stands at 19% & a reduced rate of 7%. The taxes are called MwSt. and US.
Greece has a standard rate of VAT of 24%, with reduced rates of 9% & 4.5% – throughout the Greek Islands this amount is reduced by 30% to 13%, 6% & 3%.
Hungary has a standard VAT rate of 27% & a reduced rate of 18% and 5%. The tax is called AFA and the local currency is the Hungarian Forint (Ft), which has 100 Filler to 1 Forint.
Ireland has a standard VAT rate of 23%, with reduced rates of 13.5%, 4.8% or 0%. The tax is known as CBL or VAT.
Italy has a standard rate of 22%, with reduced rates of 10%, 6% or 4%. The tax is called IVA.
Latvia has a standard rate of 21% and a reduced rate of 10%. The tax is called PVN and the local currency is the Latvian Lats (Ls) which has 100 Santims to the Lats.
Lithuania has a standard VAT rate of 21%, with reduced rates of 9% or 5%. The tax is called PVM and the local currency is the Lithuanian Litas (Lt) which has 100 Centas to the Litas.
Luxembourg has a standard VAT rate of 16% (temporarily down from 17%), with reduced rates of 12%, 9%, 6%, 3%. As in France, the tax is called TVA.
Malta has a standard VAT rate of 18% & a reduced rate of 5%.
The Netherlands has a standard rate of 21%, with reduced rates of 9% & 0%. The tax is called BTW.
Poland has a standard rate of 23%, with reduced rates of 8%, 5% & 0%. The tax is called PTU and the local currency is the Polish Zloty (zl) which has 100 Grosz to the Zloty.
Portugal has a standard VAT rate 23%, and reduced rates of 13% and 6%. The tax is called IVA.
Romania has a standard VAT rate of 19% & a reduced rate of 9%. The tax is called TVA and the local currency is the Romanian leu (L), with 100 Ban to the Leu.
Slovakia has a standard VAT rate of 20% & a reduced rate of 10%. The tax is called DPH.
Slovenia has a standard rate of 22% & a reduced rate of 9.5%. The tax is called DDV.
Spain has a standard VAT rate of 21%, with reduced rates of 10% and 4%. The tax is called IVA.
Sweden has a standard VAT of 25%, with reduced rates of 12% and 6%. The tax is called Moms and the local currency is the Swedish krona with 100 Ore to the Krone.
United Kingdom has a standard VAT rate of 20% [correct as of November 2022], with other reduced rates.
The Rest of The World
An overview of VAT rates outside the European Union follows:
Albania charges a tax called TVSH which has a standard rate of 20%. The local currency is the Albanian lek (L), 100 Quintars to the Lek.
Argentina IVA 21% 10.5% 05 Argentine peso ($) 100 Centavos to the peso
Armenia AAH – 20% 0% Armenian Dram 100 Luma to the Dram
Barbados charges VAT at a single rate of 15%. The local currency is the Barbadian dollar with 100 cents to the dollar.
Bosnia & Herzegovina – PDV 17% B & H convertible mark KM 100 Fennings to the mark
Brazil – IPI 12%, ICMS 25%, ISS 5% Brazilian real R$ 100 centavos to the real
Chile charges IVA at a single rate of 19%. The local currency is the Chilean peso which has 100 centavos to the peso.
Colombia IVA 15% Colombian peso $ 100 centavos to the peso
China 17%, 6%, 3% Chinese Yuan ¥ 100 Fen to the yuan
Croatia PDV 22% 10% Croatian Kuna (kn) 100 Lipa to the Kuna
The Dominican Republic charges ITBIS at a standard rate of 16% and reduced rates of 12% and 0%. The local currency is the Dominican Peso which has 100 Centavos to the Peso.
Ecuador charges IVA at a standard rate of 12%. The country uses the US dollar.
Fiji charges VAT at a standard rate of 15%, from January 2011. The local currency is the Fijian dollar with 100 cents to the dollar.
Georgia charges a tax called DgHg at a standard rate of 18%. The local currency is the Georgian lari which has 100 Tetri to the lari.
India charges VAT with a standard rate of 12.5%, and reduced rates of 4%, 1% and 0%. The local currency is the Rupee with 100 Paisa to the Rupee.
Japan charges Consumption Tax at a standard rate of 5%. The local currency is the Japanese Yen, with 100 sen to the Yen.
South Korea VAT 10% South Korean won 100 Jeon
Kosovo charges a tax called TVSH at a single rate of 16%. The local currency is the Euro.
Lebanon charges TVAat a single rate 10%. The local currency is the Lebanese pound with 100 piastre to the pound.
Moldova charges TVA at a standard rate 20% and a reduced rate of 5%. The local currency is Moldovan leu with 100 ban to the leu.
Pakistan charges GST at a standard rate of 16%, with reduced rates of 1% and 0%. The local currency is the Pakistani rupee, with 100 paisa to the rupee.
Serbia charges PDV at a standard rate of 18%, with reduced rates of 8% and 0%. The local currency is the Serbian dinar, with 100 para to the dinar.
Switzerland charges VAT in the form of MWST, TVA, IVA, and TPV. The standard rate is 7.6% and there are reduced rates of 3.6% and 2.4%. The local currency is the Swiss Franc which has 100 rappen to the franc.
Turkey charges KDV at a standard rate of 18% and reduced rates of 8% and 1%. The local currency is the Turkish lira with 100 kurus to the lira.
Uruguay charges IVA at a standard rate of 22% and a reduced rate of 10%. The local currency is the Uruguayan peso with 100 centesimo to the peso.
New Zealand charges GST at a single rate of 12.5%. The currency locally is the New Zealand dollar, with 100 cents to the dollar.
Iceland charges VSK at a standard rate of 24.5% and a reduced rate of 7%. The local currency is the Icelandic krona, with 100 Eyrir to the krona.
Some form of VAT is charged in most countries around the world and comes under different names. It is subject to change, so it is always wise to check the up to date VAT situation if you have any business dealings concerning VAT around the world.