There have been many announcements on changes to the French VAT rate in the past year. This included an abandoned plan to raise the standard French VAT rate from 19.6% to 21.4% in 2012. This was dropped after the Socialist government won the Parliamentary elections. It then subsequently announced that the French VAT rate would rise to 20% from 1 January 2014. This rise is still scheduled to go ahead.
There were also announced plans to raise the 7% rate (restaurants etc) to 10%. This will also still go ahead on the 1 January 2014.
The second reduced rate of 5.5% (food, power, books) was to be lowered to 5%. However, this cut has now been stopped in the Finance Act.
In accordance with the EU VAT Directive, member states must maintain a standard VAT rate of 15% or above on most goods and services. They are permitted to reduced VAT rates for public services, foodstuffs, domestic power and other sensitive goods and services. There is also a zero rate (e.g. education), and some products are exempt (e.g. financial services).
