In April 2022, the Council of the European Union adopted a Directive (2022/542) which brings about significant changes to the rate system of the EU VAT Directive (Council Directive 2006/112/EC). Most notably, it will do away with most of the existing country-specific derogations.[i] Instead, all Member States will be allowed to introduce, in addition to the current standard rate and two reduced rates, a super reduced rate (ranging between 0% and 5%) as well as a zero tax rate (so that supplies are not subject to VAT while retaining the right to deduct input VAT). Their use is however limited to 7 categories of goods and services, as is the application of the existing two reduced rates (maximum 24 categories of goods and services).[ii]
Source: kluwertaxblog.com
