VAT Rates: what does the 2022 reform provide?

VAT Directive 2006/112/EC, within Title VIII, Chapter I, Articles 93 et ​​seq., allows Member States a sufficient degree of flexibility in applying rates to supplies of goods and services. Essentially, Article 96 expressly provides that Member States shall apply a standard VAT rate, set by the State, to a percentage of the taxable base that is the same for supplies of goods and services. This rate shall not be less than 15% (Article 97). At the same time, the various EU Member States may apply a maximum of two reduced rates, set at a percentage of the taxable base that cannot be less than 5% and which apply only to the supplies of goods and services listed and provided for in Annex III.

Member States may also apply reduced rates to supplies of goods and services listed in up to 24 points in Annex III (Article 98).

However, Member States may apply, in addition to the two reduced rates, a reduced rate below the minimum of 5% and an exemption with the right to deduct the VAT paid in the previous phase to supplies of goods and services listed in up to seven points in Annex III. These exceptions may only apply to supplies of goods and services listed in the following points of Annex III: a) points 1 to 6 and 10c; b) any other point falling within the options set out in Article 105a, paragraph 1. 1.