VAT rates by country 2026 — UK, EU and UAE complete guide
Whether you're a freelancer invoicing a UK client, an Indian agency working with EU businesses, or a Shopify store selling to European customers — you need to know which VAT rate applies and how to show it on your invoice. Here are the current rates and the exact formulas.
UK VAT rates 2026
| Rate | What it applies to |
|---|---|
| 20% Standard | Most goods and services — electronics, clothing, professional services, software, SaaS |
| 5% Reduced | Home energy, children's car seats, sanitary products, some food and drink |
| 0% Zero rated | Most food, children's clothing, books, newspapers, prescription medicine |
| Exempt | Financial services, insurance, education, health services — no VAT charged or reclaimed |
UK VAT registration threshold: £90,000 annual turnover (as of 2024, still in effect 2026). Below this, you don't need to register or charge VAT.
EU VAT rates by country 2026
| Country | Standard rate | Reduced rate |
|---|---|---|
| 🇩🇪 Germany | 19% | 7% |
| 🇫🇷 France | 20% | 5.5% / 10% |
| 🇮🇹 Italy | 22% | 5% / 10% |
| 🇪🇸 Spain | 21% | 4% / 10% |
| 🇳🇱 Netherlands | 21% | 9% |
| 🇧🇪 Belgium | 21% | 6% / 12% |
| 🇵🇱 Poland | 23% | 5% / 8% |
| 🇸🇪 Sweden | 25% | 6% / 12% |
| 🇩🇰 Denmark | 25% | 0% |
| 🇮🇪 Ireland | 23% | 9% / 13.5% |
| 🇵🇹 Portugal | 23% | 6% / 13% |
| 🇬🇷 Greece | 24% | 6% / 13% |
| 🇦🇹 Austria | 20% | 10% / 13% |
| 🇨🇭 Switzerland (non-EU) | 8.1% | 2.6% / 3.8% |
UAE VAT 2026
UAE introduced VAT on 1 January 2018. The rate is 5% — one of the lowest in the world. Applies to most goods and services. Exempt: healthcare, education, financial services, local passenger transport.
UAE VAT registration threshold: AED 375,000 annual turnover. Voluntary registration at AED 187,500.
How to calculate VAT — the formulas
Adding VAT to a net price (you know the price before tax):
VAT amount = 500 × 0.20 = £100
Gross price = 500 + 100 = £600
Removing VAT from a gross price (you know the price including tax):
Net price = 600 ÷ 1.20 = £500
VAT amount = 600 − 500 = £100
The most common mistake: people calculate 20% of the gross price to find VAT. That gives the wrong answer. Always divide by (1 + rate) to extract VAT from a gross price.
Calculate VAT instantly →Do Indian freelancers need to charge VAT to UK/EU clients?
Generally, no. When an Indian business provides services to a UK or EU business (B2B), the reverse charge mechanism applies — the UK/EU client accounts for VAT themselves. You invoice without VAT, state "Reverse charge applies" on the invoice.
If you're selling digital services directly to consumers (B2C) in the EU, you may need to register for EU VAT under the OSS (One Stop Shop) scheme once you exceed €10,000 in EU consumer sales. Consult a tax professional for your specific situation.