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EU VAT is not a single number per country. Each member state can have up to four different rate types, and several countries have autonomous regions or overseas territories where completely different rules apply — or where VAT does not exist at all. This guide covers every rate type, when it applies, why it exists, and which territories you need to watch out for.
The four EU VAT rate types
The EU VAT Directive (2006/112/EC) defines four possible rate categories. No country uses all four — most use two or three. Here is what each means, when it applies, and why it exists.
Standard rate
Universal · 17%–27%
The default rate applied to all goods and services that do not fall into a special category. Every EU member state must have a standard rate of at least 15% (in practice the minimum today is 17% in Luxembourg, the maximum 27% in Hungary). If you are unsure which rate applies, use the standard rate.
Typical examples:
- Software licences
- Consulting services
- Electronics
- Clothing
- Most B2B services
Legal basis: Art. 96–97, VAT Directive 2006/112/EC
Reduced rate
Common · 5%–18%
A lower rate — at least 5% — that EU countries may apply to a defined list of goods and services set out in Annex III of the VAT Directive. Countries can have up to two different reduced rates. The list covers categories considered socially or economically important: food, medicines, books, passenger transport, hotel accommodation, cultural events, and more.
Typical examples:
- Food and non-alcoholic drinks
- Books, newspapers, e-books
- Medicines and medical devices
- Passenger transport
- Hotel accommodation
- Renovation of residential property
- Cultural and sports services
Legal basis: Art. 98–99 and Annex III, VAT Directive 2006/112/EC
Super-reduced rate
Limited countries · Below 5%
An exceptionally low rate, below 5%, that only a handful of EU states are permitted to keep as a historical exception. These rates predate the EU's 1993 VAT harmonisation and are grandfathered in — new member states cannot introduce them. They typically apply to the most essential goods: certain foods, newspapers, medicines, or tickets to cultural events.
Typical examples:
- France: 2.1% — certain medicines reimbursed by social security; press publications
- Spain: 4% — basic foodstuffs (bread, milk, cheese, eggs); books and newspapers; medicines
- Italy: 4% — basic foodstuffs; books; certain agricultural products
- Cyprus: 3% — certain foodstuffs; books and newspapers
- Luxembourg: 3% — foodstuffs; certain printed matter; children's shoes
Legal basis: Art. 110 (standstill clause), VAT Directive 2006/112/EC
Parking rate
Transitional · ≥ 12%
A parking rate is a transitional measure introduced when the EU harmonised VAT in 1993. Before harmonisation, many countries applied reduced rates to goods and services that the Sixth VAT Directive (77/388/EEC) did not include in Annex III — meaning those items would have needed to jump straight to the full standard rate. Rather than forcing an abrupt increase, the EU allowed states to "park" those items at an intermediate rate of at least 12% until they could be phased out or reassigned. Decades later, several countries still use it.
Typical examples:
- Belgium 12%: certain fuels for heating and agricultural use; cut flowers; restaurant services
- Greece 13%: selected agricultural goods; some printed publications
- Luxembourg 14%: wine; certain print materials; firewood
- Malta 12%: certain printed matter; certain confectionery items
- Portugal 13%: wine; certain animal feed; some agricultural inputs
Legal basis: Art. 103 (parking rate) and Art. 109–110, VAT Directive 2006/112/EC
The parking rate in depth
Of the four rate types, the parking rate is the least understood and the most likely to confuse developers encountering it for the first time. Here is the full picture.
Where does it come from?
When the EU adopted the Sixth VAT Directive in 1977 and then completed the single market in 1993, it defined a fixed list (Annex III) of goods and services that could qualify for a reduced rate. Many member states had existing reduced rates on items not on that list — cutting flowers, wine, certain fuels, printed advertising material, among others.
Rather than forcing an immediate jump to the full standard rate (which could have been politically and commercially disruptive), the directive allowed states to park those items at an intermediate rate of at least 12% while they gradually aligned their rules. The word "parking" is literal — the rate is parked there, in a transitional state, until the country moves it up to the standard rate or the EU adds the item to Annex III.
Why does it still exist in 2026?
The transition was never completed. Five EU countries still use the parking rate: Belgium, Greece, Luxembourg, Malta, and Portugal. Each has found that the political will to remove the rate entirely is weaker than the pressure from the industries benefiting from it. The EU has not imposed a deadline for abolition.
From a legal standpoint, the parking rate is allowed as a derogation under Article 103 of the VAT Directive. The minimum is 12%; there is no maximum other than the standard rate. Luxembourg uses 14%, Portugal and Greece 13%, Belgium and Malta 12%.
How to handle it as a developer
Most SaaS and e-commerce products never need to worry about parking rates — they apply to physical goods in very specific categories. But if you are building a general-purpose VAT calculation engine or a tax classification tool, you need to be aware that:
- A country's "reduced rates" array in the vatnode API or eu-vat-rates-data package does NOT include the parking rate — it has its own parkingRate field.
- Parking rates are listed separately in the EC TEDB database under the rate type REDUCED/PARKING_RATE.
- The parking rate is never the rate that applies by default to unclassified goods — that is always the standard rate.
- If you display a country's rates to users, show the parking rate only if you support the specific goods categories it covers.
Territorial exceptions — where rates differ
Several EU member states have overseas territories, autonomous regions, or special enclaves where the normal VAT rules do not apply. There are two distinct situations:
Outside the EU VAT area — Transactions with these territories are treated as imports or exports. EU VAT does not apply — the territory has its own local tax system (or none at all).
Inside the EU VAT area — lower rates — The territory is in the EU VAT area and follows standard VAT rules (invoicing, registration, recovery), but the rates themselves are lower than the mainland. Article 105 of the VAT Directive permits this for ultra-peripheral regions.
Spain
Canary Islands
Outside EU VAT area
Tax system: IGIC — Impuesto General Indirecto Canario
- Standard: 7%
- Reduced: 3%
- Super-reduced: 0%
- Increased: 9.5%, 15%
The Canary Islands are geographically located off the African coast and are excluded from the EU VAT area under Annex I of the VAT Directive. Goods shipped from mainland Spain or from another EU country to the Canary Islands are treated as exports — no EU VAT is charged, but IGIC applies on arrival. The rate is dramatically lower than the mainland standard of 21%, making the islands a popular destination for duty-free shopping.
EU VAT does not apply — do not charge or show VAT on invoices for this territory.
Ceuta & Melilla
Outside EU VAT area
Tax system: IPSI — Impuesto sobre la Producción, los Servicios y la Importación
- Range: 0.5%–10%
These Spanish enclaves on the northern coast of Morocco are neither in the EU customs territory nor the EU VAT area. They levy IPSI at very low rates depending on the type of good or service. Transactions with Ceuta and Melilla are treated as imports/exports for VAT purposes.
EU VAT does not apply — do not charge or show VAT on invoices for this territory.
Portugal
Azores
Inside EU VAT area — lower rates
Tax system: Portuguese VAT (IVA) at reduced regional rates
- Standard: 16%
- Intermediate: 9%
- Reduced: 4%
The Azores are an autonomous region within the EU VAT area. Article 105 of the VAT Directive allows the Portuguese legislature to apply lower VAT rates to autonomous ultra-peripheral regions. The Azores standard rate of 16% compares to 23% on the mainland — a reduction of 7 percentage points. The intermediate rate of 9% corresponds to the mainland's 13%, and the reduced rate of 4% to the mainland's 6%. Businesses operating in or shipping to the Azores must apply Azorean rates.
EU VAT invoicing rules apply — include VAT number and rate on invoices.
Madeira
Inside EU VAT area — lower rates
Tax system: Portuguese VAT (IVA) at reduced regional rates
- Standard: 22%
- Intermediate: 12%
- Reduced: 5%
Madeira is another Portuguese ultra-peripheral region with the same legal basis as the Azores but with slightly different rates — standard 22% vs 16% in the Azores. The difference reflects regional policy choices. Like the Azores, Madeira is fully in the EU VAT area, so regular VAT rules on invoicing, registration, and input tax recovery apply.
EU VAT invoicing rules apply — include VAT number and rate on invoices.
France
Guadeloupe, Martinique, Réunion
Inside EU VAT area — lower rates
Tax system: French VAT (TVA) at DOM rates
- Standard: 8.5%
- Reduced: 2.1%
- Intermediate: 3.74%
These French overseas departments (DOM — Départements d'Outre-Mer) are part of the EU VAT area as ultra-peripheral regions. Article 105 of the VAT Directive permits France to apply lower rates. The standard rate of 8.5% is less than half of the French mainland rate of 20%. Supplies from mainland France to DOM territories are treated as intra-EU supplies; the DOM rate applies at the destination.
EU VAT invoicing rules apply — include VAT number and rate on invoices.
French Guiana & Mayotte
Outside EU VAT area
Tax system: No VAT
- VAT: Not applicable
French Guiana (on the South American mainland) and Mayotte (an island in the Indian Ocean) are explicitly excluded from the EU VAT area under Annex I of the VAT Directive. No VAT is levied on goods or services in these territories. Transactions are treated as exports from the EU perspective.
EU VAT does not apply — do not charge or show VAT on invoices for this territory.
Greece
Selected Aegean islands
Inside EU VAT area — 30% reduction
Tax system: Greek VAT (ΦΠΑ) at island rates
- Standard: 17% (vs 24%)
- Reduced: 9% (vs 13%)
- Super-reduced: 3% (vs 4%)
- Parking: 9% (vs 13%)
Certain islands in the North Aegean and Dodecanese groups — including Lesvos, Chios, Samos, Ikaria, Rhodes, and Kos — benefit from a 30% reduction on all Greek VAT rates. The measure was originally introduced to support the economies of islands close to the Turkish border. It has been renewed repeatedly and remains in force. The reduced rates apply to supplies made within the island; goods shipped from the mainland are generally subject to mainland rates.
EU VAT invoicing rules apply — include VAT number and rate on invoices.
Germany
Büsingen am Hochrhein & Helgoland
Outside EU VAT area
Tax system: No German VAT
- VAT: Not applicable
Büsingen is a German exclave surrounded entirely by Switzerland and is excluded from both the EU customs territory and the EU VAT area. Swiss VAT rules apply in practice. Helgoland is a small island in the North Sea that was kept outside the EU VAT area for historical reasons. Supplies to both territories are treated as exports.
EU VAT does not apply — do not charge or show VAT on invoices for this territory.
Italy
Livigno & Campione d'Italia
Outside EU VAT area
Tax system: No VAT
- VAT: Not applicable
Livigno is a high-altitude ski resort near the Swiss border that has historically enjoyed duty-free status. Campione d'Italia is an Italian exclave inside Switzerland. Both are excluded from the EU VAT area. Goods supplied to Livigno or Campione d'Italia are zero-rated as exports from an Italian VAT perspective.
EU VAT does not apply — do not charge or show VAT on invoices for this territory.
Finland
Åland Islands
Special fiscal territory
Tax system: Finnish VAT — but special tax boundary with mainland
- Standard: 25.5% (same as mainland)
- Reduced: 10%, 13.5% (same as mainland)
The Åland Islands are in the EU VAT area and apply standard Finnish VAT rates. However, because of their special political autonomy status (a demilitarised, self-governing region under the 1921 League of Nations decision), the EU treats the Finland–Åland border as a fiscal boundary. This means that travel between Åland and mainland Finland counts as an "import/export" for VAT purposes, which is why ferries between Helsinki and Stockholm stopping at Mariehamn can sell duty-free goods. The VAT rates themselves are identical to the Finnish mainland.
EU VAT invoicing rules apply — include VAT number and rate on invoices.
Developer notes: what this means for your API calls
When validating a VAT number or determining rates for a transaction, the country code alone is not always sufficient. Here is what to keep in mind:
Canary Islands, Ceuta, Melilla, Büsingen, Helgoland, Livigno, French Guiana, Mayotte
These territories have no EU VAT registration. A business operating exclusively in these areas will not have an EU VAT number (or will have one that reflects the parent country but should not be charged EU VAT for local supplies). The standard country code for the parent state is returned by VIES, but billing software must check the delivery address before applying rates.
Portugal: PT-AC (Azores) and PT-MA (Madeira)
These are valid EU VAT registrations. The Portuguese NIF is the same format across mainland and islands. If your system collects a delivery address, apply Azorean or Madeiran rates when the postal code falls within those regions. The vatnode /rates endpoint returns mainland rates for PT — you need to handle regional logic in your application.
Greece: island rate zone
There is no separate country code or VAT prefix for Greek island rates. The determination is based on the delivery address (postal code / island name). The standard GR country code is used for all Greek VAT numbers regardless of where the business is located.
Parking rate classification
The vatnode API and eu-vat-rates-data package return parkingRate as a dedicated field, separate from reducedRates. Do not merge them. When classifying goods, parking rates apply only to historically grandfathered product categories — they are never a default fallback.
The vatnode rates endpoint returns all four rate types in a single call. You can also browse current rates interactively in the EU VAT rates tool.
curl https://api.vatnode.dev/v1/rates/BE
{
"countryCode": "BE",
"countryName": "Belgium",
"vatName": "Belasting over de toegevoegde waarde",
"vatAbbr": "BTW",
"currency": "EUR",
"standardRate": 21,
"reducedRates": [6, 12], // note: parkingRate is separate
"superReducedRate": null,
"parkingRate": 12, // Belgium's parking rate
"countryVatUpdatedAt": "2026-04-02"
}
FAQ
What is a parking VAT rate?
The parking rate is a transitional VAT rate that some EU member states kept after the 1993 VAT harmonisation. It applies to goods and services that were at a reduced rate before the EU's Sixth VAT Directive but no longer qualify for a reduced rate under harmonised rules. The parking rate must be at least 12% and is currently used by Belgium, Greece, Luxembourg, Malta, and Portugal.
Is VAT applied in the Canary Islands?
No. The Canary Islands are part of the EU customs territory but are excluded from the EU VAT area. They use their own indirect tax called IGIC (Impuesto General Indirecto Canario) with a standard rate of 7%, which is much lower than the Spanish mainland VAT of 21%.
Do the Azores and Madeira have different VAT rates from mainland Portugal?
Yes. The Azores and Madeira are autonomous regions within the EU VAT area, but EU law permits them to apply lower rates. The Azores have a standard rate of 16% (vs 23% on the mainland) and Madeira 22%. Reduced rates are also lower in both regions.
Which Greek islands have reduced VAT rates?
Certain Aegean islands close to Turkey — including Lesvos, Chios, Samos, and the Dodecanese — benefit from a 30% reduction on all Greek VAT rates. This gives them a standard rate of 17% instead of 24%, and proportionally lower reduced and parking rates.
