VAT indicators

Paper by Alexandre Mathis. Under the current VAT system defined in the Sixth VAT Directive, Member States are required to have a single VAT rate of at least 15% and may have a maximum of two reduced VAT rates set no lower than 5%. Annex H of the 6th Directive outlines the list of the goods and services to which reduced rates could apply. However, this basic structure which applies to all Member States is complicated by the numerous individual temporary derogations granted to particular Member States. Most of these specific rates (zero rate, super reduced rates, parking rate and so on) are to be found under the title XVI Transitional provisions Article 28 of the 6th Directive and most have been granted until the entry into force of the 'definitive system' of VAT based on taxation in the Member State of origin. The aim of this paper is to shed some light on the application of the current VAT system to both VAT bases and rates among Member States.