Rates of VAT

V1.111 Rates in the EU

When the European Commission made its initial proposals for an origin basis of taxation (for which see V1.210), it suggested that all member states should have only two rates of value added tax: a standard rate between 14% and 20% and a reduced rate between 4% and 9%. However, there were many objections to the idea of centrally fixed rates and, after much debate, these proposals were rejected.

As part of the arrangements for the introduction of the Single Market, the member states did reach a measure of agreement on the harmonisation of rates of value added tax:

  1.  

    •     It was agreed that, from 1 January 1993 until 31 December 1996, the standard rate of value added tax applied by each member state should not be less than 15%1. This date of 31 December 1996

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