VAT Rates by Country: Complete 2026 Guide to Global Tax Rates

What Is VAT?

Value Added Tax (VAT) is a consumption tax levied on goods and services at each stage of the supply chain. Unlike a single-stage sales tax, VAT is collected incrementally — every business charges VAT on its sales and reclaims the VAT it paid on its purchases. The end consumer bears the full tax burden. Governments worldwide rely on VAT because it is self-policing and generates substantial revenue.

Over 170 countries now operate a VAT or GST (Goods and Services Tax) system. The names differ, but the mechanism is essentially the same: tax is applied to the value added at each stage of production and distribution, and only the final consumer cannot reclaim it.

Standard VAT & GST Rates by Country (2026)

The table below lists current standard and reduced VAT/GST rates for major economies. Rates are subject to change — always verify with the relevant tax authority before filing.

Standard vs Reduced Rates

Most countries that levy VAT apply a standard rate to the majority of goods and services, alongside one or more reduced rates for specific categories. Reduced rates typically apply to essential items such as food, children's clothing, books, public transport, and medical supplies. Some jurisdictions also apply a zero rate — the item is technically taxable but at 0%, allowing the seller to reclaim input VAT.

The distinction matters because the applicable rate directly affects the final price a consumer pays. A product taxed at the UK reduced rate of 5% costs significantly less than the same product at the standard 20%. Businesses selling mixed-rate goods need systems that apply the correct rate to each line item — errors lead to under- or over-collection and potential penalties from the tax authority.

Zero-rated goods (common in the UK for food staples and children's clothes) benefit the seller: they charge 0% to customers but can still reclaim the VAT paid on business inputs. Exempt goods, by contrast, carry no VAT charge but the seller cannot reclaim input VAT either — a critical difference for cash flow.

Regional Highlights

European Union

EU member states must maintain a standard VAT rate of at least 15%. In practice, rates range from 17% (Luxembourg) to 27% (Hungary). Cross-border sales within the EU follow special rules, including the One Stop Shop (OSS) scheme for digital services, which allows businesses to file a single VAT return for all EU sales.

Asia-Pacific

GST systems in Australia (10%), New Zealand (15%), and Singapore (9%) are broad-based with few exemptions. India's GST, introduced in 2017, replaced a patchwork of central and state taxes with a four-tier structure (5%, 12%, 18%, 28%). Japan's consumption tax sits at 10% with a reduced 8% rate for food and non-alcoholic beverages.

Americas

Canada combines a federal GST (5%) with provincial sales taxes, resulting in effective rates of 5% to 15% depending on province. Brazil operates one of the most complex indirect tax systems in the world, with multiple overlapping state and federal levies. Mexico applies a flat 16% IVA with a 0% rate on food and medicines.

How to Use These Rates

If you know the net (pre-tax) price of a product or service, multiply by the applicable VAT rate to find the tax amount. For a £500 item in the UK at 20%: £500 × 0.20 = £100 VAT, so the gross price is £600. To extract the VAT from a gross price, divide by (1 + rate). For the same £600: £600 ÷ 1.20 = £500 net.

Use the VAT Calculator to compute VAT for any rate instantly, or jump directly to Add VAT or Remove VAT for the specific calculation you need. If you operate in the US and deal with sales tax instead, try the Sales Tax Calculator.

For a broader explanation of how VAT works, including registration thresholds and filing requirements, see our guide on VAT Explained. To understand how VAT compares to US-style sales tax, read VAT vs Sales Tax.