EU VAT Rates 2026: Complete Guide to All 27 Countries for Digital Services

1. All 27 EU VAT Rates for Digital Services

If you sell SaaS, digital downloads, streaming services, or any other electronically supplied service to customers in the EU, you need to charge VAT at the rate of the customer's country. Not your country — theirs. This is the destination principle, and it's been the law since 2015.

Here is the complete table of all 27 EU member states with their standard VAT rate, the rate that applies to digital services, and any important notes. Digital services almost always get the standard rate — there are very few exceptions, and SaaS is never one of them.

Country	Standard Rate	Digital Services	Notes
🇦🇹 Austria	20%	20%	Reduced rates for e-books (10%)
🇧🇪 Belgium	21%	21%	Reduced rate for e-books (6%)
🇧🇬 Bulgaria	20%	20%	Lowest cost-of-living EU state
🇭🇷 Croatia	25%	25%	Joined the euro in 2023
🇨🇾 Cyprus	19%	19%	Popular for EU company formation
🇨🇿 Czech Republic	21%	21%	Uses Czech koruna, not euro
🇩🇰 Denmark	25%	25%	No reduced rates — 25% across the board
🇪🇪 Estonia	22%	22%	Raised from 20% in Jan 2024
🇫🇮 Finland	25.5%	25.5%	Raised from 24% in Sep 2024
🇫🇷 France	20%	20%	Reduced rate for e-books/e-press (5.5%)
🇩🇪 Germany	19%	19%	Largest EU economy; e-books at 7%
🇬🇷 Greece	24%	24%	Island regions may have reduced rates for goods
🇭🇺 Hungary	27%	27%	Highest VAT rate in the EU
🇮🇪 Ireland	23%	23%	Popular Non-Union OSS registration country
🇮🇹 Italy	22%	22%	E-books/e-newspapers at 4%
🇱🇻 Latvia	21%	21%	—
🇱🇹 Lithuania	21%	21%	—
🇱🇺 Luxembourg	17%	17%	Lowest standard rate in the EU
🇲🇹 Malta	18%	18%	Second lowest rate in the EU
🇳🇱 Netherlands	21%	21%	Popular Non-Union OSS registration country
🇵🇱 Poland	23%	23%	E-books/e-journals at 5%
🇵🇹 Portugal	23%	23%	Azores and Madeira have lower rates for goods
🇷🇴 Romania	19%	19%	Uses Romanian leu, not euro
🇸🇰 Slovakia	23%	23%	Raised from 20% in Jan 2025
🇸🇮 Slovenia	22%	22%	—
🇪🇸 Spain	21%	21%	E-books at 4%; Canary Islands excluded from EU VAT
🇸🇪 Sweden	25%	25%	Uses Swedish krona, not euro

Use our cross-border tax calculator to instantly determine the correct rate for any country combination, including the right invoice wording.

2. Highest and Lowest Rates

Hungary holds the record for the highest standard VAT rate in the EU at 27%. It has been at this level since 2012, and there are no signs of it coming down. For a $100/month SaaS product sold to a Hungarian consumer, you'd need to add $27 in VAT — bringing the total to $127.

Luxembourg sits at the other end with the lowest standard rate of 17%. This is one reason many companies historically incorporated there (though the EU has worked to close tax-shopping loopholes for digital services by mandating destination-based taxation).

Here's the full picture:

• Highest rates (25%+): Hungary (27%), Finland (25.5%), Croatia (25%), Denmark (25%), Sweden (25%)
• Mid-range (21-24%): Greece (24%), Ireland (23%), Poland (23%), Portugal (23%), Slovakia (23%), Estonia (22%), Italy (22%), Slovenia (22%), Belgium (21%), Czech Republic (21%), Latvia (21%), Lithuania (21%), Netherlands (21%), Spain (21%)
• Lower rates (17-20%): Austria (20%), Bulgaria (20%), France (20%), Cyprus (19%), Germany (19%), Romania (19%), Malta (18%), Luxembourg (17%)

The EU-wide average is approximately 21.5%. When you're pricing your SaaS for the European market, this is a useful mental benchmark. Some founders choose to bake VAT into their pricing (so a European customer pays the same sticker price as a US customer, and the founder absorbs the VAT). Others add VAT on top. Either way, you need to know these rates.

The spread matters for pricing strategy. A customer in Luxembourg pays 10 percentage points less VAT than one in Hungary. If you're charging VAT on top, your product looks 10% cheaper in Luxembourg. If you're absorbing it, your margins are significantly better on Luxembourg sales than Hungarian ones.

3. Which Rate Applies to SaaS?

Short answer: the standard rate. Always.

SaaS (Software as a Service) is classified as an "electronically supplied service" under EU VAT law. This category also includes downloadable software, hosting, cloud storage, and most digital products. All of these are subject to the standard VAT rate in every EU country without exception.

You may have heard that some EU countries offer reduced VAT rates for e-books and electronic publications. This is true — for example, France charges only 5.5% on e-books (vs. 20% standard), and Germany charges 7% (vs. 19% standard). But this reduced rate applies only to e-books, e-newspapers, and e-journals. It does not apply to SaaS, online courses, streaming video, or any other digital service.

The only exception that might be relevant to some founders: if you're selling standalone e-books or digital publications (not as part of a SaaS subscription), some countries allow a reduced rate. But the eligibility criteria are strict, and you'd need to classify the product correctly country by country. For more detail on classification, see our EU VAT guide for indie hackers.

4. Recent Rate Changes

EU VAT rates don't change often, but when they do, they almost always go up. Governments facing budget pressures tend to raise VAT rather than cut spending. Here are the most recent changes that affect digital services:

Estonia: 20% → 22% (January 2024)

Estonia raised its standard rate by 2 percentage points to help fund defense spending and balance the national budget. This was the first Estonian VAT increase in over a decade. The rate applies to all digital services including SaaS.

Finland: 24% → 25.5% (September 2024)

Finland went from an already-high 24% to 25.5%, making it the second-highest standard rate in the EU after Hungary. The 1.5-point increase was part of a broader fiscal consolidation package. The unusual half-point increment makes Finland the only EU country with a non-whole-number standard rate.

Slovakia: 20% → 23% (January 2025)

Slovakia implemented a substantial 3-percentage-point increase, jumping from 20% to 23%. This was the largest single rate increase in the EU in recent years, driven by government efforts to reduce the fiscal deficit.

Looking ahead, there is no firm indication of further rate changes in 2026, but several countries have discussed possible increases. The trend over the past decade has been steadily upward across the EU. If you're building a billing system, design it to handle rate changes gracefully — it's not a question of if, but when.

5. B2C vs B2B Rules

The VAT rate you charge depends heavily on whether your customer is a consumer (B2C) or a business (B2B). Getting this distinction right is critical.

B2C: Charge the destination country rate

When you sell to a consumer (an individual without a VAT number), you charge VAT at the rate of the customer's country. A sale to a consumer in Germany means 19% VAT. A sale to a consumer in Hungary means 27% VAT. There's no way around this — it's the destination principle.

If you're based in the EU and your total cross-border B2C digital sales are below €10,000 per year, you can use the small seller exception: charge your home country rate instead. Once you cross that threshold, you must switch to destination rates and register for OSS.

If you're based outside the EU, there is no threshold. You must charge the destination rate from the very first sale.

B2B: Reverse charge at 0%

When your customer is a VAT-registered business in another EU country, the reverse charge mechanism applies. You charge 0% VAT and include the note "Reverse charge — Article 196 VAT Directive" on your invoice. Your customer then accounts for the VAT on their own return. It's revenue-neutral for them.

For the reverse charge to apply, three conditions must be met:

1. The customer has a valid EU VAT number — they must provide it to you
2. You verify the number — use the VIES checker (we built a free one) to confirm it's valid and active
3. You and the customer are in different EU countries — reverse charge doesn't apply to domestic sales

For a deeper dive into handling cross-border invoicing correctly, including the exact wording to use in each scenario, see our guide on creating tax-compliant cross-border invoices.

6. One-Stop Shop (OSS) Explained

The One-Stop Shop is the EU's solution to a massive headache. Without it, a SaaS founder selling to consumers across the EU would need to register for VAT in every country where they have customers — potentially all 27 member states. That's 27 registrations, 27 sets of returns, and 27 tax authorities to deal with.

With OSS, you register once, file one quarterly return, and make one payment. Your registration country distributes the VAT to the correct member states on your behalf.

Union OSS vs Non-Union OSS

There are two flavors, and which one you need depends on where you're based:

• Union OSS — for sellers established in an EU country. You register in your home country. It covers B2C digital sales to consumers in all other EU countries (not your home country — you handle that through your normal domestic VAT return).
• Non-Union OSS — for sellers based outside the EU (US, UK, Canada, India, etc.). You pick any one EU country to register in. It covers B2C digital sales to consumers in all 27 EU countries. Many non-EU founders choose Ireland or the Netherlands because of English-language support and straightforward processes.

How OSS filing works

1. Each quarter, you report your B2C sales broken down by EU member state
2. You calculate the VAT due at each country's rate
3. You pay the total amount to your OSS registration country
4. Returns are due by the end of the month following the quarter (e.g., Q1 return due by April 30)

OSS doesn't cover B2B sales (those use reverse charge) or domestic sales (those go through your normal VAT return). It also doesn't cover non-EU sales. It's purely for B2C cross-border digital services within the EU.

For a complete walkthrough of when and how to register, see our guide to VAT registration.

7. Quick Reference: All 27 Rates

Here's a compact grid for quick lookups when you're invoicing or configuring your billing system:

Country	Rate	Country	Rate
🇦🇹 Austria	20%	🇱🇻 Latvia	21%
🇧🇪 Belgium	21%	🇱🇹 Lithuania	21%
🇧🇬 Bulgaria	20%	🇱🇺 Luxembourg	17%
🇭🇷 Croatia	25%	🇲🇹 Malta	18%
🇨🇾 Cyprus	19%	🇳🇱 Netherlands	21%
🇨🇿 Czech Republic	21%	🇵🇱 Poland	23%
🇩🇰 Denmark	25%	🇵🇹 Portugal	23%
🇪🇪 Estonia	22%	🇷🇴 Romania	19%
🇫🇮 Finland	25.5%	🇸🇰 Slovakia	23%
🇫🇷 France	20%	🇸🇮 Slovenia	22%
🇩🇪 Germany	19%	🇪🇸 Spain	21%
🇬🇷 Greece	24%	🇸🇪 Sweden	25%
🇭🇺 Hungary	27%	🇮🇪 Ireland	23%
🇮🇹 Italy	22%

8. EU vs US vs UK Comparison

If you sell globally, you're dealing with three fundamentally different systems. Here's how they compare:

	EU VAT	US Sales Tax	UK VAT
Type	Value Added Tax	Sales Tax	Value Added Tax
Rate	17%–27% (varies by country)	0%–10.25% (varies by state/locality)	20% (single rate)
Basis	Destination country	Economic nexus (state-by-state)	UK-wide
Registration threshold	€10K for EU sellers; none for non-EU	Varies by state ($100K–$500K)	£85K annual turnover
SaaS taxable?	Yes, always	Depends on state	Yes, always
Simplified filing	OSS (one return for all 27 countries)	No federal equivalent	Single HMRC return
B2B reverse charge	Yes (cross-border)	No	Yes (for non-UK sellers)
Number of jurisdictions	27 countries, 1 OSS return	45+ states with sales tax, individual filing	1 country, 1 return

The key differences in practice:

• EU VAT is simpler than it looks. Thanks to OSS, you register once and file one quarterly return. The rates are higher than US sales tax, but the system is more unified. The EU also has the reverse charge for B2B, which eliminates VAT on most business-to-business transactions.
• US sales tax is a patchwork. Each state has its own rules, rates, thresholds, and definitions of what's taxable. Some states tax SaaS, others don't. There's no federal sales tax and no equivalent of OSS. If you have nexus in 10 states, you file 10 returns. For more detail, see our guide to SaaS sales tax by US state.
• UK VAT is the simplest — one rate (20%), one country, one return. But the £85K registration threshold is generous, so many small sellers don't need to register at all.

9. Frequently Asked Questions

What is the average EU VAT rate?

The average standard VAT rate across all 27 EU member states is approximately 21.5%. Rates range from 17% in Luxembourg to 27% in Hungary. For SaaS and digital services, the standard rate always applies — there are no reduced rates.

Do all EU countries charge VAT on SaaS?

Yes. All 27 EU member states charge VAT on SaaS and other electronically supplied services at the standard rate. There are no exemptions, zero-rates, or reduced rates for SaaS in any EU country. Some countries offer reduced rates for e-books or e-publications, but those don't apply to software subscriptions.

Which EU country has the lowest VAT rate?

Luxembourg has the lowest standard VAT rate in the EU at 17%. Malta is the second lowest at 18%. However, since EU VAT on digital services is destination-based, your customer's location determines the rate — not where your company is incorporated.

Do I charge VAT on B2B sales in the EU?

No, for cross-border B2B sales within the EU, the reverse charge mechanism applies. You charge 0% VAT and note "Reverse charge — Article 196 VAT Directive" on your invoice. The business customer accounts for the VAT on their own return. You must verify their VAT number using the VIES system before applying the reverse charge.

What is the OSS threshold?

For EU-based sellers, the OSS threshold is €10,000 in cross-border B2C digital sales per year. Below this threshold, you can charge your home country's VAT rate on all EU sales. Once you exceed €10K, you must register for OSS and charge destination-country rates. For non-EU sellers, there is no threshold — you must charge destination rates and register for Non-Union OSS from the first sale.

How often do EU VAT rates change?

Infrequently, but the trend is upward. Most rates stay stable for years. The most recent changes were Estonia (20% to 22%, January 2024), Finland (24% to 25.5%, September 2024), and Slovakia (20% to 23%, January 2025). When changes happen, they typically take effect on January 1 or the first day of a quarter. Build your billing system to handle rate changes, and monitor announcements from the European Commission.

This guide is for informational purposes only and does not constitute tax or legal advice. Tax rules change frequently. Always consult a qualified tax professional for your specific situation.