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EU action against 7 states on VAT rate freedoms

European Commission: seven states fail to fully implement reduced rate freedoms

The EC has opened infringement proceedings against eight member states for their failure to fully communicate their transposition on the new rules on reduced VAT rate freedoms.  Introduced on a voluntary basis in 2022, and mandatory from January 2025, the set new, more flexible rules for reduced rates. EU member states had to communicate the full transposition of the Directive into national law by 31 December 2024

The member states are:

  • Bulgaria;
  • Belgium;
  • Greece;
  • Lithuania;
  • Portugal;
  • Romania; and
  • Spain.

Expanding goods which may benefit from reduced VAT rates

The Directive on rates of VAT allows for a wider use by Member States of reduced rates, including the use of zero rates for essential products such as food, pharmaceuticals and products intended for medical use. Furthermore, country-specific VAT rates called derogations were opened to all Member States, thus ensuring equal treatment across the Union.

The member states now have two months to respond, complete its transposition and notify its national measures to the Commission. In the absence of a satisfactory response, the Commission may decide to issue a reasoned opinion.

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