Current VAT Rate

Value-added tax, or VAT is used in Germany, France, and Italy. It is a tax on the sale of goods and services. VAT is an indirect tax. This means customers pay it when they buy something. Businesses collect the tax at the point of sale. Registered businesses then pass the VAT to the government.

They do this through regular tax reports. VAT applies to most goods and services in these countries. Some items may qualify for lower rates. A few goods and services may be exempt. VAT is a major source of public income. It helps fund schools, health care, and roads.

Current VAT Rates in UK

The standard VAT rate is 20 percent. It applies to most goods and services. There is also a reduced rate of 5 percent.
This rate covers home energy. It also applies to children’s car seats. Sanitary products fall under this lower rate as well.

Some goods have a zero percent VAT rate. Most food is zero rated. Children’s clothes are also zero rated. Books and newspapers usually qualify too.

Certain items are VAT exempt. Postage stamps are one example. Financial services are often exempt. Some property transactions are exempt as well. You can use a VAT calculator to add or remove VAT from a price.

A Short History of VAT in the UK

The UK introduced VAT in 1973. It replaced the old Purchase Tax. The VAT rate has changed over the years. Since 2011, the standard rate has remained at 20 percent.

Some services are exempt from VAT. Banking and insurance are common examples.

Year	Standard VAT Rate
1973 – 1974	10%
1974 – 1979	8%
1979 – 1991	15%
1991 – 2008	17.5%
2008 – 2009	15%
2009 – 2011	17.5%
2011 – Present	20%

Above UK VAT History Table

How VAT Is Paid in the UK

Businesses must register for VAT once turnover passes £90,000. They collect VAT from customers. The money is then paid to HMRC. VAT can be paid through online banking. It can also be paid by Direct Debit. Debit or credit card payments are accepted too. Payments must reach HMRC on time. Late payment can result in penalties.

register for VAT

Current VAT Rate in Germany

The standard VAT rate is 19 percent. This rate applies to most products and services. A reduced rate of 7 percent also applies. It covers items like food, books, and newspapers.

History of VAT in Germany

Germany introduced VAT in 1968. Since then, it has applied to most sales nationwide. VAT is now a normal part of everyday business.

Germany VAT History Table

Year	Standard VAT Rate
1968 – 1977	10%
1978 – 1982	13%
1983 – 1992	14%
1993 – 1997	15%
1998 – 2006	16%
2007 – Present	19%

How VAT Is Paid in Germany

Businesses must register for VAT when required by law. They collect VAT from customers and report it. The payment is made to the German tax office. VAT is usually paid by bank transfer. Some businesses use direct debit. Late payments can lead to fines. Paying on time helps avoid penalties.

Current VAT Rates in France

France applies VAT to most goods and services. Standard VAT rate is 20 percent. This rate covers the majority of sales. There are also reduced VAT rates. A 10 percent rate applies to certain goods and services. A 5.5 percent rate covers some basic items. Some services are exempt from VAT. Medical and certain public services fall into this group.

History of VAT in France

France introduced VAT in 1954. It was one of the first countries to use this system. Today, VAT applies across the whole country.

France VAT History Table

Year	Standard VAT Rate
1954 – 1967	16.85%
1968 – 1981	17.6%
1982 – 1994	18.6%
1995 – 1999	20%
2000 – 2013	19.6%
2014 – Present	20%

How VAT Is Paid in France

Businesses must register for VAT when required by law. They collect VAT from customers. The tax is then paid to the French tax authority. Payments are usually made through online banking. It is important to pay on time. Late payments may result in penalties.

Current VAT Rates in Italy

Italy charges VAT on most goods and services. The standard VAT rate is 22 percent. This rate applies to most sales.

There are also lower VAT rates.
A 10 percent rate applies to some goods.
A 5 percent rate is used in limited cases.
A 4 percent rate covers certain basic items.

Some goods and services are VAT exempt. These items do not include VAT in the price.

History of VAT in Italy

Italy introduced VAT in 1973. Since then, it has applied to most sales nationwide. VAT is now part of everyday business activity.

Italy VAT History Table

Year	Standard VAT Rate
1973 – 1980	12%
1981 – 1988	14%
1989 – 1997	19%
1998 – 2010	20%
2011 – 2013	21%
2013 – Present	22%

How VAT Is Paid in Italy

Businesses must register for VAT when required by law. They collect VAT from customers and report it. Tax is paid to the Italian tax authority. Payments are usually made by bank transfer. It is important to meet the payment deadline. Late payments may result in fines.