The year 2024 brings some important changes to the VAT rates, rules and regulations in the EU. Some countries have increased or decreased their VAT rates, while others have introduced new exemptions or reduced rates for certain goods and services. In this blog post, we will summarize the main VAT updates in the EU in 2024 and explain how they may affect your business.

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READ MORE: Can Businesses Still Get Registered for IOSS?
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EU VAT Rate Changes in 2024

Several EU countries have changed their VAT rates in 2024, either as part of their regular fiscal policy or as a response to the COVID-19 pandemic. Here are some of the most notable VAT rate changes in 2024:

• Estonia has increased its standard VAT rate from 20% to 22%, effective from January 1, 2024¹.
• Switzerland has increased its standard VAT rate from 7.7% to 8.1%, while also increasing its reduced rates from 3.7% to 3.8% and 2.5% to 2.6%, effective from January 1, 2024².
• Ireland has reduced its VAT rate for audiobooks and e-books from 9% to 0%, effective from January 1, 2024³. It has also introduced a 0% VAT rate for the supply and installation of solar panels on school buildings, as well as ancillary equipment included on the same contract, effective from January 1, 2024³. However, it has reverted its temporary VAT rate reductions for the tourism and hospitality sectors, hairdressing, and certain pharmaceutical and health-related products, which were introduced in 2023 as a stimulus measure, back to their original rates of 13.5% or 23%, effective from August 1, 2024³.
• Romania has decreased its standard VAT rate from 15% to 14%, effective from January 1, 2024. This rate will remain in place until January 1, 2027, when it will be reduced to 13%⁴.
• Luxembourg: Luxembourg has increased its standard, intermediate and reduced VAT rates by 1%, effective from January 1, 2024¹. The new rates are 17%, 14%, and 8%, respectively. The super-reduced VAT rate remains at 3%. This measure is part of the government’s plan to reduce the public debt and finance social and environmental policies¹.
• Czech Republic: The Czech Republic has consolidated its two previous reduced VAT rates (10% and 15%) into a new reduced rate of 12%, effective from January 1, 2024. The standard rate remains at 21%. The new reduced rate applies to a wide range of goods and services, such as food, books, newspapers, medicines, public transport, accommodation, cultural events, and more. The aim of this reform is to simplify the VAT system and reduce the administrative burden for businesses and consumers².

Outside the EU

United Kingdom: The United Kingdom, which left the EU in 2020, has introduced a new VAT on Digital Services (ViDA) scheme, effective from April 1, 2024³. This scheme requires businesses that provide digital services to UK consumers, such as streaming, gaming, cloud computing, online advertising, and social media, to register and account for UK VAT at the rate of 20%. The ViDA scheme applies regardless of where the business is established, and there is no registration threshold. The ViDA scheme replaces the previous Mini One-Stop Shop (MOSS) scheme, which was based on the EU rules and allowed businesses to declare their VAT obligations for all their EU sales of digital services in one single EU member state³. The ViDA scheme is expected to generate additional tax revenue for the UK and ensure fair taxation of the digital economy³.

The VAT landscape in the EU in 2024 is quite dynamic and complex, with many changes affecting different countries, sectors, and transactions. Therefore, it is crucial for businesses to stay informed and updated on the VAT updates in the EU in 2024, and to adapt their processes and systems accordingly. If you need any assistance or guidance on how to comply with the VAT updates in the EU in 2024, please do not hesitate to contact us. We are here to help you with all your VAT needs.

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