Italy is confirmed plans to raise Value Added Tax from 21% to 22% from 1 October 2013. The Reduced Rates will be: 10%; 5%; and 4%. Check global VAT and GST rates with VAT Calc’s tracker
The rise was originally submitted in June 2011, and was scheduled for January 2014. However, following continuing volatility in the financial markets during the summer, and fast rising Italian debt prices, the rise had been brought forward.
Many other European states have been forced into austerity VAT rate changes include: UK, Finland,Romania, Poland, Ireland, the Netherlands, France, Spain, Greece, Czech Republic. Whilst there is an inflationary cost, which may dent already fragile consumer confidence.
Many countries have used VAT rises as a funding mechanism to enable them to cut labour tax charges. This shift in the tax burden moves the charge from job-creating industry onto the consumer. This manipulation of the cost of production (salaries) gives the effect of currency devaluation which is ordinarily unavailable to the Euro currency countries.