Reduced & Super Reduced Rate

The European Union’s VAT directives make allowances for member states to define up to two reduced rates of VAT. These rates are usually referred to as the reduced and super reduced rate of VAT. These reduced rates can generally only be applied to the specific goods and services set out in Annex H of Directive 92/77/EC (outlined below) and must be set between the country’s standard rate, and a lower limit of 5%.

There were a number of exceptions granted to member states when the Directive was adopted in order to allow them to continue to apply a reduced rate for goods and services which were not covered by Annex H. This is referred to as the “parking rate.”

Directive 92/77/EC Annex H

  1. preparation of foodstuffs; products normally intended to be used to supplement or substitute foodstuffs
  2. Water supplies
  3. Pharmaceutical products of a kind normally used for health care, prevention of diseases and treatment for medical and veterinary purposes, including products used for contraception and sanitary protection
  4. Medical equipment, aids and other appliances normally intended to alleviate or treat disability, for the exclusive personal use of the disabled, including the repair of such goods, and children’s car seats
  5. Transport of passengers and their accompanying luggage
  6. Supply, including on loan by libraries, of books (including brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or substantially devoted to advertising matter
  7. Admissions to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities Reception of broadcasting services
  8. Services supplied by or royalties due to writers, composers and performing artists
  9. Supply, construction, renovation and alteration of housing provided as part of a social policy
  10. Supplies of goods and services of a kind normally intended for use in agricultural production but excluding capital goods such as machinery or buildings
  11. Accommodation provided by hotels and similar establishments including the provision of holiday accomodation and the letting of camping sites and caravan parks
  12. Admission to sporting events
  13. Use of sporting facilities
  14. Supply of goods and services by organizations recognized as charities by Member States and engaged in welfare or social security work, insofar as these supplies are not exempt under Article 13
  15. Services supplied by undertakers and cremation services, together with the supply of goods related thereto
  16. Provision of medical and dental care as well as thermal treatment in so far as these services are not exempt under Article 13
  17. Services supplied in connection with street cleaning, refuse collection and waste treatment, other than the supply of such services by bodies referred to in Article 4 (5)