EU VAT, reverse charge and the One Stop Shop
Each EU member state sets its own standard VAT rate, from 17% in Luxembourg to 27% in Hungary. When a business in one member state sells services to a VAT-registered business in another, the customer usually accounts for the VAT: the reverse charge in Article 196 of Directive 2006/112/EC.
Last reviewed 10 November 2026 by ReckonOS research (source check; not yet reviewed by an accountant).
Estimates based on the rules for the European Union as of 10 November 2026. Check with your accountant. Each section below links to the official source it is based on, with the date we checked it. This page is research, not tax advice.
Standard rates in all 27 member states
Austria 20%, Belgium 21%, Bulgaria 20%, Croatia 25%, Cyprus 19%, Czechia 21%, Denmark 25%, Estonia 24%, Finland 25.5%, France 20%, Germany 19%, Greece 24%, Hungary 27%, Ireland 23%, Italy 22%, Latvia 21%, Lithuania 21%, Luxembourg 17%, Malta 18%, Netherlands 21%, Poland 23%, Portugal 23%, Romania 21%, Slovakia 23%, Slovenia 22%, Spain 21%, Sweden 25%.
The Directive sets a floor of 15% for the standard rate with no maximum. The Your Europe table we checked was last updated by the Commission on 13 July 2026.
Sources: Your Europe: VAT rules and rates (opens in a new tab) (checked 5 November 2026).
Reverse charge between businesses
The European Commission explains that the customer is liable for the VAT when it is a business acting as such, the service is supplied where the customer is established (Article 44), and the supplier is not established in the customer’s country.
Article 196 makes the VAT payable by the taxable person to whom those services are supplied. The supplier’s invoice shows no VAT and states that the reverse charge applies.
Sources: European Commission: persons liable for VAT (opens in a new tab) (checked 5 November 2026); Council Directive 2006/112/EC (EUR-Lex) (opens in a new tab) (checked 5 November 2026).
Selling to consumers in other member states
Since 1 January 2019 an annual €10,000 threshold applies to cross-border telecommunications, broadcasting and electronic services to consumers, and since 1 July 2021 it also covers distance sales of goods. Above it, VAT is due in the customer’s member state, which the One Stop Shop lets you declare in one return.
Sources: European Commission: One Stop Shop (opens in a new tab) (checked 5 November 2026).
E-invoicing ahead
Under VAT in the Digital Age, digital reporting requirements will apply to cross-border business-to-business transactions from 1 July 2030. Some member states have earlier domestic rules; see the Belgium and Germany pages.
Sources: European Commission: VAT in the Digital Age (opens in a new tab) (checked 5 November 2026).
What ReckonOS does with these rules
- Applies the standard rate of the supplier’s member state, and reverse charge with the Article 196 wording when a business client in another member state has a valid VAT number (checked with VIES).
- For consumers in other member states, reminds you of the €10,000 One Stop Shop threshold, and once you turn on OSS in Settings charges the customer’s rate with the OSS note.
- Exports any invoice as Peppol-ready UBL (Peppol BIS Billing 3.0). Sending it over the Peppol network needs a certified access point.
- Applies standard rates only; reduced and zero rates other than reverse charge, export and exempt treatments are not modelled.
Other countries
United States · United Kingdom · Germany · Belgium · Canada · Australia · Nigeria
Questions
Which EU country has the highest standard VAT rate?
Hungary, at 27%. Luxembourg has the lowest standard rate, 17%. The Directive requires at least 15%.
When does reverse charge apply in the EU?
Generally when a business in one member state supplies services to a VAT-registered business in another, under Article 196 of Directive 2006/112/EC. The customer accounts for the VAT and the supplier’s invoice shows none.
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