Portugal's Azores raises VAT to 18%

The Portuguese independent region of the Azores islands has raised its standard Portuguese Value Added Tax (Imposto sobre o Valor Acrescentado) rate from 16% to 18%.  The rise was passed into law on 1 January 2014.

The reduced VAT rate of 9% (IVA intermedio) on water, fuel, entertainment etc will rise to 10%.  The other reduced rate of 4% (IVA reduzido) on basic foodstuffs and hotels also increased to 5%.

Portugal has been forced into two VAT rises since the start of the global financial crisis.  The first 1% Portuguese VAT rise to 20% came in July 2010.  A second, 2% Portugal VAT rise to 22% followed at the start of 2011.  The average EU VAT rate is now over 20%.