Skip links

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.

  • Cyprus has extended cut on domestic electricity to 5% until 31 Aug 2022
  • Luxembourg cuts VAT on diesel till end of 2022
  • 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
  • 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.

You can receive our regular global VAT and GST news by signing up today!

Leave a comment