Allgemein, Newsroom, VAT | 12. July 2021

Lea’s VAT rules Update for July

The wide variety of VAT rules for supposedly identical products sometimes does not make it easy for cross-border merchants. I present special examples here once a month. by

VAT Rules Update July

What do coffee, peat and potatoes have in common? That’s right! Quite curious tax rates in the different countries of Europe. In my monthly VAT Update I give an insight into the sometimes crazy taxation of different products.

Coffee in Italy

The Italians and their coffee: not only is the perfect roasted aroma of the coffee bean a science in itself, Italy is also not taking the easy way out in terms of VAT. Only coffee extract is taxed at a reduced VAT rate of 10%, classic coffee has to make do with the standard VAT rate of 22%.

Peat in Ireland, Italy, Portugal and Luxembourg

Do you know the different uses of peat? Peat as a heating fuel is taxed at a reduced VAT rate of 13,5% in the Republic of Ireland, while Italy reduces the VAT rate for peat when it is used as a fertiliser. Portugal takes an even more granular approach and has a reduced VAT rate only for peat litter used as fertiliser. Luxembourg takes the simpler route: peat is taxed at a reduced VAT rate of 3% here, regardless of its use.

Potatoes in Sweden and Finland

Sweden generally taxes potatoes for human consumption at a reduced VAT rate of 12%. However, if it is a seed potato, the standard VAT rate of 25 % applies. Their neighbour Finland has a different view here: the potato, whether for seed purposes or for our lunch, is taxed at a reduced VAT rate of 14%.

Author

Lea-Luisa Blase
Lea-Luisa Blase successfully completed her master's degree in business and tax law at the University of Potsdam. She then worked as a tax assistant at BDO AG Wirtschaftsprüfungsgesellschaft. As an editorial project manager, she then expanded her profession at an online seminar provider specifically for the tax sector and is currently employed at eClear as a VAT consultant in the internal tax department. She also prepares the content for the eClear VATRules, which contain more than 1.2 million tax codes including all exceptions, reductions and exemptions.
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