What is VAT Rate?

VAT Rules in Different Countries

The value of VAT varies from country to country here is a list of the VAT rates for 2020. Keep in mind that not all countries use VAT but its equivalent such as GST or Sales tax, rates for those will also be given in this list.

 

Standard VAT rate list for Online vat calculator

CountryStandard VAT rate (%)
Afghanistan 10%
Albania 20%
Algeria19%
Andorra4.5%
Angola14%
Antigua and Barbuda15%
Argentina21%
Armenia 20%
Australia 10%
Austria20%
Azerbaijan18%
Bahamas12%
Bahrain5%
Bangladesh15%
Barbados 17.5%
Belarus20%
Belgium21%
Belize15%
Benin18%
Bhutan50%
Bolivia13%
Bosnia and Herzegovina17%
Botswana 12%
Brazil 17%
Brunei55%
Bulgaria20%
Burkina Faso18%
Burundi18%
Cabo Verde15%
Cambodia10%
Cameroon19.25
Canada5%
Central African Republic19%
Chad18%
Chile19%
China13%
Colombia19%
Comoros10%
Congo (Congo-Brazzaville)18
Costa Rica13%
Côte d'Ivoire18%
Croatia25%
Cuba10%
Cyprus19%
Czechia (Czech Republic)21%
Democratic Republic of the Congo18%
Denmark25%
Djibouti10%
Dominica15%
Dominican Republic18%
Ecuador12%
Egypt14%
El Salvador13%
Equatorial Guinea15%
Eritrea5%
Estonia20%
Eswatini (fmr. "Swaziland")15%
Ethiopia15%
Fiji9%
Finland24%
France20%
Gabon18%
Gambia15%
Georgia18%
Germany19%
Ghana12.5%
Greece24%
Grenada15%
Guatemala12%
Guinea15%
Guinea-Bissau17%
Guyana14%
Haiti10%
Honduras15%
Hungary27%
Iceland24%
India18%
Indonesia10%
Iran9%
Iraq0%
Ireland23%
Israel16%
Italy22%
Jamaica16.5%
Japan5%
Jordan16%
Kazakhstan12%
Kenya16%
Kiribati10%
Kuwait5%
Kyrgyzstan12%
Laos10%
Latvia21%
Lebanon11%
Lesotho14%
Liberia10%
Libya0%
Liechtenstein7.7%
Lithuania21%
Luxembourg17%
Madagascar20%
Malawi16.5%
Malaysia6%
Maldives6%
Mali18%
Malta18%
Marshall Islands0%
Mauritania16%
Mauritius15%
Mexico16%
Micronesia5%
Moldova20%
Monaco19.6%
Mongolia10%
Montenegro21%
Morocco20%
Mozambique17%
Myanmar (formerly Burma)5%
Namibia15%
Nauru5%
Nepal13%
Netherlands21%
New Zealand13%
Nicaragua15%
Niger7.5%
Nigeria7.5%
North Korea15%
North Macedonia18%
Norway25%
Oman 5%
Pakistan17%
Palau7.5%
Palestine State16%
Panama7%
Papua New Guinea10%
Paraguay10%
Peru18%
Philippines12%
Poland23%
Portugal23%
Qatar 5%
Romania19%
Russia20%
Rwanda18%
Saint Kitts and Nevis17%
Saint Lucia12.5%
Saint Vincent and the Grenadines16%
Samoa15%
San Marino 17%
Sao Tome and Principe0%
Saudi Arabia5%
Senegal18%
Serbia20%
Seychelles15%
Sierra Leone15%
Singapore7%
Slovakia20%
Slovenia22%
Solomon Islands12.14%
Somalia5%
South Africa15%
South Korea10%
South Sudan18%
Spain21%
Sri Lanka8%
Sudan17%
Suriname10%
Sweden25%
Switzerland7.7%
Syria40%
Taiwan5%
Tanzania18%
Thailand7%
Timor-Leste2.5%
Togo18%
Tonga15%
Trinidad and Tobago12.5%
Tunisia19%
Turkey18%
Turkmenistan15%
Tuvalu5%
Uganda18%
Ukraine20%
United Arab Emirates5%
United Kingdom20%
United States of America10%
Uruguay22%
Uzbekistan20%
Vanuatu12.5%
Venezuela16%
Vietnam10%
Yemen 5%
Zambia16%
Zimbabwe14.5%

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

What is VAT?

Text book definition:

A value added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of a supply chain, from production to the point of sale.

In simple terms:

VAT is a tax that put on the product at each stage of production. It is a certain percentage that each company/brand involved in the chain of production has to pay to the government.

Countries that use VAT:

VAT is used by more than 160 countries but is slowly being replaced in some with the good and services tax or GST for short.

What is VAT based on?

Instead of most tax that is based on ones income VAT is solely based on user consumption.

Example:

Let’s say there is a candy company, they make a candy with $2 worth of materials the company selling the materials, from where they are buying, sells it at $2.20 where the 20 cents is the VAT. The candy company manufactures a candy for $5.40 where 20 cents is the VAT and 20 cents is to make up for the VAT they paid when buying the materials. Then a retailer sells the candy at $7.60 where 20 cents is the VAT and 40 cents is to make up for the VAT paid by the company.

From the example if you don’t understand then in simple terms at each stage of purchase a fixed amount is the VAT the upper amount is to make up for the VAT paid by the preceding entity in the chain of production.

Important points to remember:

  • A VAT is added at every point of production in the supply chain.
  • VAT is a fixed amount paid by everyone it isn’t hinder by wealth.
  • VAT is slowly being replaced with a tax known as GST which is a combination of multiple taxes including VAT.

What is the standard rate of VAT?

In the European Union the VAT is 20% on most goods and services but is reduced to 5% for certain goods and services such as products related to children and home energy and is 0% for most food and children clothing.

VAT rates differ country to country but are a fixed amount. Some countries reduce overall VAT while some reduce VAT on certain supply lines so if you want to know more about the VAT of a country make sure you check out our table.

Difference between a VAT and sale tax:

Arguably VAT and sales tax can create the same amount of revenue the difference lies at the point money is paid.

When it comes to sales tax the government receives a tax on sale for example on $1 sale the government will receive a 10 cents tax, but when it comes to VAT each entity on the supply chain will pay a tax such as a materials company will pay 3 cents in VAT a production company 4 cents in VAT and a retail company 3 cents in VAT in the entire production line a total of 10 cents of VAT is paid.

The difference is that the amount is same but the way the amount is met is different where sales tax are applied on one point or the end point of production chain i.e. the sales point the VAT is applied at all stages of production from materials to sales.

GST

In some countries VAT is replaced with GST which is known as “Goods and Services Tax” the terms are interchangeable though they can differ tremendously in their respective countries.