If you sell digital products or SaaS to customers anywhere in Europe, you are dealing with 27 different VAT regimes. Standard rates range from 17% in Luxembourg to 27% in Hungary. Most countries operate two or three rate tiers. Four countries changed their standard rates between 2024 and 2025.
This guide covers the current VAT rate for every EU member state, what each rate type means, what changed recently, and what digital businesses actually need to do about it.
What Is EU VAT?
Value Added Tax is a consumption tax collected at each stage of the supply chain. The end customer bears the cost. Businesses collect it and remit it to the relevant tax authority.
The EU VAT Directive creates the framework. Each of the 27 member states sets its own rates within those rules. The minimum standard rate permitted under the directive is 15%. Not a single country is close to that floor.
For digital products and SaaS, VAT is charged at the buyer's country rate, not the seller's. A customer in Germany pays German VAT. A customer in Hungary pays Hungarian VAT. You do not get to pick which rate applies.
EU VAT Rate Types
Before the full table, a quick breakdown of what the different rate categories mean.
Standard rate: The default rate applied to most goods and services. Every EU member state has one. Ranges from 17% to 27% across the bloc.
Reduced rate: A lower rate applied to specific categories listed in the EU VAT Directive's Annex III. Food, medicines, books, public transport, and hotel accommodation are typical examples. Countries may have one or two reduced rates, each must be at least 5%.
Super-reduced rate: A rate below 5%, available only for categories that already held that status before 1991. A small number of countries still apply these. France uses 2.1% on certain medicines and press publications. Italy and Spain apply 4% to essential food and books. Luxembourg applies 3% to a range of essentials.
Zero rate: Applied by some countries to a narrow set of items, most commonly basic foodstuffs and children's clothing. Ireland is the most prominent example.
EU VAT Rates by Country: Complete 2026 Table
All data sourced from the European Commission Tax and Duty Database (TEDB), updated June 2026.
Country | Standard Rate | Reduced Rate(s) |
|---|---|---|
Austria | 20% | 10%, 13% |
Belgium | 21% | 6%, 12% |
Bulgaria | 20% | 9% |
Croatia | 25% | 5%, 13% |
Cyprus | 19% | 5%, 9% |
Czech Republic | 21% | 12% |
Denmark | 25% | None |
Estonia | 24% | 9% |
Finland | 25.5% | 10%, 14% |
France | 20% | 5.5%, 10% |
Germany | 19% | 7% |
Greece | 24% | 6%, 13% |
Hungary | 27% | 5%, 18% |
Ireland | 23% | 9%, 13.5% |
Italy | 22% | 5%, 10% |
Latvia | 21% | 5%, 12% |
Lithuania | 21% | 5%, 9% |
Luxembourg | 17% | 8%, 14% |
Malta | 18% | 5%, 7% |
Netherlands | 21% | 9% |
Poland | 23% | 5%, 8% |
Portugal | 23% | 6%, 13% |
Romania | 21% | 5%, 9% |
Slovakia | 23% | 5%, 10% |
Slovenia | 22% | 5%, 9.5% |
Spain | 21% | 10% |
Sweden | 25% | 6%, 12% |
Notes: France, Italy, Spain, Luxembourg, and Cyprus also apply super-reduced rates below 5% to a narrow set of historically grandfathered categories. Ireland zero-rates basic foodstuffs and children's clothing. Denmark is the only EU member state with no reduced rate at all.
What Digital Businesses Need to Know
The destination principle
For digital services and SaaS, VAT always applies at the buyer's country rate. A subscription sold to a customer in Hungary attracts 27% VAT. The same subscription sold to a customer in Germany attracts 19%. You apply the customer's country rate at checkout.
The EUR 10,000 threshold
If your total EU B2C sales across all member states remain below EUR 10,000 in a calendar year, you can charge your own country's VAT rate instead of the destination country rate. Once you cross that threshold, destination rates apply across the board.
The EU One-Stop Shop (OSS)
Registering for VAT individually in every EU country where you have customers is impractical for most businesses. The OSS scheme lets you register once, in a single member state, and file one quarterly return covering your entire EU VAT liability. Most digitally-sold products qualify. It is the standard approach for SaaS and digital product businesses selling across multiple EU markets.
B2B reverse charge
When selling to a VAT-registered business in another EU country, you do not charge VAT. The buyer accounts for it themselves under the reverse charge mechanism. Verify your buyer's VAT number before applying zero-rating. A failed reverse charge assignment is your liability, not theirs. Want a deeper dive into how the reverse charge mechanism works? Read our full guide here.
How Merchant of Record Services Handle EU VAT
For businesses handling EU VAT in-house, the real workload is not the registration. It is the ongoing operational layer: charging the correct destination rate at checkout, updating your tax tables when Slovakia or Romania changes rates, generating compliant invoices in each jurisdiction, and filing quarterly.
A Merchant of Record (MOR) removes this entirely. MoR is the legal entity that processes transactions, assumes tax and compliance responsibility, and manages refunds and liabilities for every sale made on your behalf. In practice, that means the MoR's name sits on the invoice. Their legal entity files the tax returns. When a customer in France disputes a charge, the chargeback lands with the MoR, not with you.
tiun is a Merchant of Record built for SaaS and AI companies. What makes it different from the other MOR options is that it does not stop at payments and tax. Auth, billing, subscriptions, customer data, and analytics all live in the same system. No webhook logic stitching things together, no reconciliation jobs, no separate tools that drift out of sync.
The pricing comparison below reflects what founders actually pay across the MOR options:
tiun | Polar | Paddle | Lemon Squeezy | Stripe | |
|---|---|---|---|---|---|
MOR | Yes | Yes | Yes | Yes | Yes (+3.5%) |
Base transaction | 2.9% + $0.30 | 5% + $0.50 | 5% + $0.50 | 5% + $0.50 | 2.9% + $0.30 |
International cards | Included | +1.5% | Included | +1.5% | +1.5% |
Subscription billing | +0.5% | Included | Included | +0.5% | +0.7% |
All-in transaction cost | ~3.4% + $0.30 | ~6.5% + $0.50 | ~5% + $0.50 | ~7% + $0.50 | ~9.6% + $0.30 |
VAT compliance is included in all MOR options. The difference is what you pay per transaction and how much of your backend the platform actually replaces.
Frequently Asked Questions
Which EU country has the highest VAT rate?
Hungary, at 27%. It is also among the highest consumption tax rates anywhere in the world.
Which EU country has the lowest VAT rate?
Luxembourg, at 17%. It is the only EU member state below 18%.
Does Denmark have a reduced VAT rate?
No. Denmark applies its 25% standard rate to almost all goods and services. It is the only EU member state with no reduced rate.
What VAT rate applies to digital services in the EU?
There is no single EU-wide rate for digital services. The applicable rate is the standard rate of the customer's country. A subscription sold to a customer in France attracts 20%. The same subscription sold to a customer in Hungary attracts 27%.
Do I need to register for VAT in every EU country I sell into?
Not if you use the EU OSS scheme. One registration in a single member state covers your B2C obligations across all 27. Most digital businesses use this.
What is the minimum standard VAT rate allowed in the EU?
The EU VAT Directive sets a minimum of 15%. No member state currently operates anywhere near that floor. Luxembourg is the lowest at 17%.
How often do EU VAT rates change?
Standard rates change infrequently, typically once every few years per country and usually announced in that country's annual budget law. Reduced rate scopes move more often, especially since the 2022 expansion of Annex III categories. Running an annual review each January covers most updates.
What is the difference between a reduced rate and a super-reduced rate?
Reduced rates must be at least 5% and apply to categories listed in Annex III of the EU VAT Directive. Super-reduced rates go below 5% and are only available for categories that held sub-5% status before 1991. Only France, Italy, Spain, Luxembourg, and Cyprus currently use them.