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EU Parliament votes to cap VAT at 25%

  • Oct 29, 2018 | Richard Asquith

The European Parliament has requested an amendment to Commission VAT reforms to include a maximum cap on the EU standard VAT rate of 25%. Currently there is no upper limit, but only Hungary, with a rate of 27%, breaches this suggested limit.

European parliamentarians were voting on two measures when they added the amendment: VAT simplifications for small and medium sized businesses; and new freedoms for member states to control reduced VAT rate setting.

The proposed changes to the Commission’s VAT reforms will now be passed on to the EU Council, which will then be tasked with adopting the legislation.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.