A study on the economic effects of the current VAT rates structure

This study provides a comprehensive overview of the distributional effects of the VAT rates structures currently in place in the EU-27 Member States. It builds on a consistent database and uses a coherent methodology that facilitates the meaningful comparison of effective VAT rates across categories of goods and services and across countries. This is crucial as the degree to which governments rely on zero and reduced rates varies greatly across countries, generating an uneven picture of effective VAT rates in the EU. This report sets out to analyse, for each country, the distributional effects of the current, diversified VAT rates structure, and to estimate how the abolition of zero and reduced rates would affect VAT payments by households and non-households, both overall and for socio-economic sub-groups (low-income households, single-parent households, etc.) and sector (health, education, etc.). It estimates the magnitude of additional VAT revenues that could be generated by abolishing zero and reduced rates, and quantitatively assesses the likely macroeconomic consequences (in each Member State and across the EU) of the implementation of a uniform VAT rates structure within each Member State