What VAT is — and why the rate depends on the country
Value Added Tax is the EU's harmonised consumption tax: businesses charge it on sales, reclaim the VAT they paid on purchases, and the final consumer bears the cost. The EU sets the framework — including a minimum standard rate of 15% — but each member state chooses its own standard rate. That is why the same €100 net service costs €117 in Luxembourg and €127 in Hungary.
Every country also has reduced rates for specific goods and services (food, books, medicines, hotels, restaurants). This calculator uses standard rates only; if you're pricing groceries or hotel rooms, a reduced rate may apply instead. The table above reflects standard rates in force for 2026 — no member state changed its standard rate in 2026.
Methodology
Extract VAT: net = gross ÷ (1 + rate); VAT = gross − net
The common mistake is extracting VAT by subtracting the rate percentage (e.g. taking 19% off €119 gives €96.39, not €100). Division by (1 + rate) is the correct method, and it's what this calculator does.
Worked example
€100 net, Germany (19%), add VAT: gross = €100 × 1.19 = €119.00; VAT = €19.00. Reversed — €119 gross, extract: net = €119 ÷ 1.19 = €100.00. Same transaction, Hungary (27%): €100 net → €127.00 gross — an €8 difference on every €100, which is why cross-border sellers watch these rates closely.
2026 standard VAT rates — all 27 EU 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%.
Frequently asked questions
Why does Hungary charge 27% while Luxembourg charges 17%?
The EU only sets a 15% minimum standard rate; each state chooses its own. Hungary has kept the EU's highest rate for years; Luxembourg the lowest. Both are compliant with EU rules.
Did any EU country change its standard VAT rate in 2026?
No — all 27 standard rates are identical to 2025. The most recent changes were Slovakia (20%→23%, Jan 2025), Estonia (22%→24%, Jul 2025) and Finland (24%→25.5%, Sep 2024). Some reduced rates changed in 2026 (e.g. Finland's second reduced rate, Dutch hotel VAT).
What about reduced rates?
Most states apply lower rates to food, books, medicines, passenger transport and hospitality. This calculator covers standard rates only — check your country's reduced-rate list for those goods.
How do I extract VAT from a gross price correctly?
Divide by (1 + rate): at 20%, net = gross ÷ 1.20. Don't just subtract 20% — that understates the net amount.
I'm in the Canary Islands — which rate applies?
The Canaries don't apply Spanish VAT (IVA) at all — they use IGIC, with a 7% general rate. This calculator's Spain option (21%) is for mainland Spain and the Balearics.
Can businesses reclaim VAT?
Generally yes — VAT-registered businesses reclaim input VAT on purchases, so VAT is ultimately borne by the final consumer. Cross-border B2B sales within the EU often use the reverse-charge mechanism (0% charged, customer accounts for it).
Rates verified for 2026 · Last reviewed October 2026 · Sources: European Commission — VAT rules & rates