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European energy, petrol, diesel & food VAT rate cuts on inflation crisis

Eurozone energy inflation 38% April 2022; temporary VAT subsidies for domestic power, foods and other basics

A fast-growing queue of European countries are emerging to cut their already reduced VAT rates on domestic energy, petrol and foods. Eurozone headline inflation hit 7.5% in April 2022, up from 7.4% since March. Energy price inflation was 38% in April (32% for February) 2022 in the Eurozone area.

The EU introduced new reduced EU VAT rate setting freedoms on 6th April 2022 which allows member states to use a reduced VAT rate below 5% for the first time on a controlled ranges of goods and services. Plus, extended the categories of supplies eligible for the other two reduced rates permitted below their standard rate.

  • Bulgaria cuts VAT on VAT on heating and bread for one year
  • Slovenia considers domestic electricity, fuel and digital newspapers to 5% in September
  • Poland likely to rollover temporary VAT cuts on fuel, electricity and food due to expire July
  • Latvia Bill to zero rate basic food stuffs from 15 July
  • Ireland to extend again VAT cut to restaurants, cafes and tourism on inflation worries
  • Estonia to temporarily cut VAT on domestic energy until May 2023
  • Ireland gas & electricity VAT cut to 9% for 6 months as inflation hits 40-year high
  • Portugal further duty cuts as wait confirmation on cut VAT on petrol to 13%
  • France Presidential candidates offer petrol and energy VAT cuts
  • Netherlands VAT cut on energy and duty reduction on petrol till Dec 2022
  • Estonia cuts VAT on petrol and heating fuel from 30 April
  • UK cuts fuel duty by 5p per litre; zero-rates domestic energy saving VAT rate
  • Belgium is to cut gas and electricity to 6% between March and September 2022
  • Cyprus has cut VAT on domestic electricity from 19% to 9% and petrol to 5%
  • Italy has cut the VAT rate to 5% on domestic and industrial natural gas until 30 June 2022
  • Spain has cut VAT on domestic fuel from 21% to 10% until 30 Jun 2022.
  • North Macedonia cuts VAT in basic foodstuffs (0%) and petrol (10%) from March 2022. Electricity rate cut till Jun 2023
  • Croatia to cut VAT on heating and basic foodstuffs from April 2022
  • Turkey to cut foodstuffs VAT from 8% to 1% and electricity to 8% as inflation escalates
  • Romania is reducing domestic electricity from 19% to 5% in 2022. It is also considering cutting foodstuffs VAT to 0%. A proposal to cut VAT on petrol is also being prepared for April 2022.
  • Greece is reviewing a VAT cut to electricity and basics
  • Lithuania is looking to cut VAT to 0% on thermal power and domestic natural gas and basic foods until start of May 2022
  • Czechia Ministry of Finance reduced to 0% VAT on domestic gas and electricity in breach of the VAT Directive and waived collections for Nov and Dec 2021. Full 21% rate now applies again in 2022.
  • Ukraine considering zero-rating from 20% of fuel in light of Russian invasion
  • Norway whilst not cutting VAT rate, is planning direct payments against electricity bills when they reach certain levels.

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