Green Circle Talks about Cross-border】EU VAT Tax Rate at a Glance: How are Different Goods Taxed?

EU VAT rates at a glance: how are different goods taxed?

Value Added Tax (VAT) on goods is standardized across EU member states, however different rates may apply to different types of goods. Understanding how different goods are taxed is important for import/export and cross-border e-commerce businesses. Below you will find a detailed overview of the VAT rates in the European Union and how different commodities are taxed.

First of all, we need to understand that when selling goods within the European Union, the VAT rate is determined according to the standard of the country in which it is located. For example, Germany, France, Italy, etc. have a standard rate of 20%, while Portugal and Luxembourg have a rate of 17%. However, certain goods, such as food, books, medical supplies, etc., can enjoy lower super-reduced tax rates, which are determined by the governments of the respective countries.

Secondly, when it comes to imported goods, they are also taxed under the EU's import VAT regulations. According to these rules, when goods are imported from a non-EU member state, the corresponding VAT will need to be paid to the customs authorities of the importing country, and if you as a cross-border e-commerce merchant are selling goods within the EU, you will need to determine how to tax them in accordance with the EU's cross-border e-commerce VAT rules.

The EU also has more specific rules on how different goods are taxed. For example, the EU has implemented a set of special VAT rules for the sale of digital products and services. Under these rules, digital products and services from non-EU member states are subject to VAT at the rate of the country in which the consumer is located, which is designed to ensure fairness and reasonableness in cross-border digital transactions.

In addition, within the EU, new VAT rules have been introduced for small value imports for cross-border transactions. Under these rules, importers can enjoy special VAT exemptions when the value of the goods is less than €22. This initiative is designed to minimize the burden on importers and facilitate the development of small-value import transactions.

Overall, the EU's list of VAT rates and the way in which different goods are taxed is quite complex, and companies and individuals need to be aware of the relevant regulations when conducting transactions to ensure legal compliance. As the EU continues to deepen cross-border trade, VAT rates and taxation methods may be adjusted accordingly, so staying on top of the situation and adjusting your strategy in a timely manner is crucial to the smooth operation of your business.