VAT in Europe – The Rise and Rise of VAT

As Europe muddles through to sort out its economic crisis, one of the measures for raising revenue has been the increase of VAT rates. VAT of course impacts on our travel costs and some of the VAT rates in Europe are already extremely high. So any further VAT increases certainly isn’t good news for the travelling public.

What is Vat

Unfortunately, VAT is not “Vodka and Tonic” as one cartoon suggests.

Value Added Tax or VAT is a broadly based consumption tax that is assessable on goods and services. From a traveller’s perspective, we pay VAT on accommodation, restaurant meals and other goods and services that we consume on holidays. It is a government tax and the seller of the goods and services is required to collect the tax and pay it to the revenue authorities.

VAT is payable in all EU member states and in France you will see it referred to as TVA (Taxe sur la Valeur Ajoutée) or in Italy it is IVA (Imposta sul Valore Aggiunto).

VAT Refund

For travellers who live outside of the EU, you can get a VAT refund on your shopping in Europe, if the value of your purchases meets the VAT threshold of that country. So, if you’re planning on doing a lot of shopping on your European holiday, it pays to find out about the VAT rules for that country.

VAT Tax Rate for 2012

Below are 2012 Standard VAT tax rates for some of the destinations we cover:

VAT Rates in EU